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OF 

' 

INTRODUCTION. 


THE  following  chapters  upon  such  economic  and  social 
principles  as  affect  the  interests  of  the  time,  are  mainly 
devoted  to  a  view  of  free  trade  and  protection  in  their 
economic  and  social  aspects ;  but  such  currency,  govern- 
mental, and  social  principles  as  naturally  presented  them- 
selves to  the  author's  mind — as  they  will  to  the  reader's 
while  holding  the  subject  under  consideration — have  to  a 
certain  extent  entered  into  the  composition  of  the  work. 

Political  Economy  as  a  science  has  not  yet  attained  to 
perfection.  As  regards  the  principles  of  that  science 
most  prominently  treated  here,  who  can  say  that  they  are 
settled  questions  ?  The  nations  of  the  world  are  divided 
in  their  practice,  and  where  the  truth  of  the  theory  of 
free  trade  is  admitted,  its  adoption  is  opposed  on  the 
ground  of  inexpediency.  Looking  at  the  subject  from  a 
point  of  view  that  takes  in  the  world  and  the  nations 
thereof,  regarding  the  question  of  free  exchange  in  its 
international  as  well  as  its  national  bearings,  and  viewing 
its  effects  upon  humanity  at  large  in  its  character  of  a 
remedial  agent,  the  author  of  this  work  would  see  it 

1 


2  INTRODUCTION. 

raised  if  possible  above  the  arena,  where  circumstances 
have  for  the  time  cast  the  question  of  its  merits.  He 
would  wish  to  see  it  considered  by  the  candid  and  intelli- 
gent of  this  country,  and  of  the  world,  in  a  light  stronger 
and  purer  than  that  which  burns  dimly  amid  the  smoke 
and  din  of  political  strife.  Believing  that  with  the 
progress  of  intelligence  and  humanity,  it  has  yet  to 
reach  a  point  elevated  above  'the  field  of  combat  it  has 
heretofore  to  some  extent  occupied,  and  that  its  merits 
will  be  judged  irrespective  of  party,  as  they  are  herein 
considered,  the  author  has  ventured  to  devote  the  evenings 
of  a  winter  month  to  recording  his  convictions  upon  the 
subject.  A  belief  in  the  truth  of  the  principles  is  the 
sufficient  excuse  for  presenting  them  to  the  public. 

If  the  savans  of  political  economy  say  there  is  nothing 
new  advanced  here — Very  well !  this  is  not  professedly 
an  elaborate  treatise  upon  political  economy  ;  it  takes  but 
a  few  steps  within  the  broad  circle  of  that  science  which 
embraces  all  forms  of  wealth-producing  industry,  and  all 
shades  of  value.  If  those  who  have  not  penetrated  to 
the  centre  of  that  circle  find  something  new,  or  a  familiar 
truth  put  into  a  shape  that  seizes  their  understanding  with 
a  noticeable  grasp — Better.  If  the  young,  and  those 
who  have  not  before  considered  the  subject,  are  taught 
some  of  the  truths  they  ought  to  know,  and  catch  the 
spirit  of  the  truth  that  lies  in  Free  Exchange — Excel- 
lently well ! 


INTRODUCTION.  3 

This  is  not  designed  to  be  entirely  an  abstract  theore- 
tical essay ;  the  principles  are  combined  with  their  appli- 
cations, and  the  effects  experience  has  evolved  are  re- 
ferred to  as  far  as  the  plan  of  the  work  will  admit ; 
and,  only  in  their  relations  and  analogies  with  free  trade, 
are  the  various  branches  of  the  economical  science  treated. 
The  object  has  been  to  popularize  the  subject,  therefore 
various  illustrations  have  been  introduced,  and  in  a  dis- 
cursive style  the  language  has  frequently  sought  to  depart 
from  that  of  dry  scientific  reasoning. 

Viewed  in  the  lights  imparted  by  economical  and  social 
science,  and  the  spirit  of  humanity,  free  trade  is  seen  to 
be  true  economical  policy  and  an  efficient  ameliorative 
agent. 

Believing  its  power,  if  universally  adopted,  more  effec- 
tive as  a  sound  remedy  than  has  been  generally  supposed, 
and  that  many  of  the  theories  afloat  upon  the  subject  are 
false  in  principle,  a  few  pages  have  been  devoted  to  the 
consideration  of  free  trade  as  a  remedial  agent,  and  its 
comparison  with  other  theories. 

It  is  the  custom  in  many  places  to  listen  periodically 
to  certain  addresses,  and  to  read  certain  lengthy  brochures 
treating  of  the  beauties  of  protection.  In  these  it  is  the 
fashion  to  decry  free  trade  as  the  especial  enemy  of  the 
country,  and  to  stigmatize  its  advocates  as  demagogues, 
venal  traitors  bought  up  by  the  loose  change  of  Europe, 
as  hybrids  all  of  knave  and  fool.  From  the  point  of  view 


4  INTRODUCTION. 

in  which  he  regards  the  subject  the  author  has  felt  no 
bitterness,  and  found  no  difficulty  in  cultivating  a  more 
charitable  disposition  towards  the  advocates  of  protection. 
He  believes  the  great  majority  of  them  to  be  sincere  in 
their  opinions.  There  are  two  kinds  of  protectionists.  A 
few  there  are  who  hug  it  for  its  profits,  at  the  same  time 
believing  their  interests  and  the  public's  to  be  identical — 
a  not  uncommon  weakness.  Besides  these,  there  are  a 
large  number  who  love  it  solely  for  the  benefits  they  think 
it  must  confer  upon  their  country. 

It  has  been  difficult  to  prevent  this  work  growing  under 
the  writer's  hand  to  a  size  far  beyond  the  limits  originally 
prescribed  for  it.  But,  replete  as  the  subject  is  with 
matter  for  investigation,  and  notwithstanding  the  tendency 
to  lead  the  inquirer  into  the  several  branches  of  the  econo- 
mical and  social  sciences,  he  has  resisted  the  temptation 
in  order  to  keep  the  matter  within  a  compass  that  may  be 
reached  by  all ;  knowing  that  the  multiplication  of  small 
books  throws  the  subject  into  the  hands  of  a  greater 
number  of  readers  for  consideration  ;  and  that,  thanks  to 
the  genius  of  our  institutions,  the  readers  are  now  the 
masses. 

If  there  be  found  repetitions,  the  author  considers  him- 
self absolved  from  blame  for  their  appearance.  So  many 
forms  of  reasoning  in  favor  of  protection,  and  of  objections 
to  free  trade,  have  been  advanced,  many  of  them  tending 
to  the  same  end,  that  in  their  treatment  it  has  been  ne- 


INTRODUCTION.  5 

cessary  to  repeat  processes  of  reasoning  which  were  to 
determine  similar  conclusions,  though  starting  from  posi- 
tions apparently  different. 

And,  as  all  who  are  familiar  with  the  subject  will 
understand,  the  effects  wrought  by  free  trade  upon  all  the 
elements  of  production  ramify  so  generally  throughout  the 
field  of  political  economy  as  to  embrace  most  of  the  prin- 
ciples that  constitute  the  science.  Hence,  the  repetitions 
attendant  upon  the  tracing  of  a  variety  of  causes  and 
effects  to  the  fundamental  principles,  few  in  number,  which 
govern  them,  must  involve  repetitions  always  accompany- 
ing the  treatment,  upon  a  scale  sufficiently  large,  of 
economical  questions.  All  the  topics  broached,  directly 
and  incidentally,  are  not  presumed  to  be  exhausted.  If 
what  is  said  prove  to  be  suggestive,  a  sufficiently  extended 
aim  will  have  been  achieved,  and  the  author  will  be  satis- 
fied, knowing  that  a  few  little  seeds  scattered  with  the  wind 
often  produce  much  and  good  fruit. 

The  subject  of  free  trade  as  a  social  remedial,  especial- 
ly calls  for  general  consideration  and  agitation  at  this  stage 
of  the  progress  of  humanity — this  era,  that  signally 
seeks  to  honor  the  squalid,  poverty-stricken  laborer,  and 
upon  which  coming  ages  will  look  back  as  the  second 
manger  that  cradled  the  genius  of  that  Humanity  born 
child  of  the  Christianity  which  eighteen  centuries  ago 
drew  its  first  breath  among  the  manger  straw  of  Bethle- 
hem ! 


6  INTRODUCTION. 

In  view  of  a  source  whence  he  has  derived  information 
embraced  herein,  it  is  proper  that  the  author  here  ac- 
knowledge, with  thanks,  his  indebtedness  to  the  members 
of  the  first  Congrds  des  Economistes  of  Nations,  assembled 
at  Brussels,  in  1847,  for  the  pleasure  and  instruction  de- 
rived from  their  able  discussions  during  the  several  sit- 
tings in  which  he  had  the  honor  of  participating  in  their 
deliberations. 

NEW  YOBK,  December •,  1848. 


I. 


THE    QUESTIONS    STATED. 

IF  we  were  to  inquire  what  is  the  great  problem  of  this 
age,  the  solving  of  which  is  occupying  the  ablest  heads 
and  warmest  hearts  of  Christendom,  the  ready  answer 
would  doubtless  be,  that  it  is  the  improvement  of  the  con- 
dition of  the  poorer  classes  ;  that  is  to  say,  the  more  general 
distribution  among  them  of  the  products  of  industry.  It 
would  be  understood  that  with  this  material  benefit  is  con- 
joined the  moral  one  of  a  diffused  light  of  intelligence,  an 
element  springing  from  that  Sun  of  Christianity  whose 
rays  illume  the  moral  world.  Many  measures  are  doubt- 
less necessary  to  the  realization  of  so  glorious  a  result. 

Upon  application  of  the  principles  of  the  economic 
science,  and  by  reference  to  the  experience  of  nations  as 
developed  in  their  practice,  it  is  to  be  seen  if  freedom  of 
exchange  is  adapted  to  the  promotion  of  the  great  result, 
and  if  restriction  operates  against  its  attainment. 

What  we  first  require  is  abundance  of  production.  That 
without  abundant  products  the  poor  must  be  deprived  of 
any  very  considerable  proportion  for  their  consumption,  is 
evident.  It  is  then  necessary  to  consider  first,  if  unre- 
stricted exchange  promotes  abundant  production.  The 
advocates  of  free  exchange  say  it  does.  But  it  may  be 


8  INDUSTRIAL   EXCHANGES. 

said  that  abundant  production  is  not  sufficient ;  that  im- 
proved distribution  of  the  reward  of  industry  is  also 
necessary.  It  will  be  seen  that  improved  distribution  is  a 
natural  consequence  of  abundance,  and,  provided  restriction 
in  its  various  forms  of  injustice  does  not  interpose,  is  inevi- 
table. Here  we  have  the  logical  statement  of  the  question 
of  amelioration — the  social  view.  The  error  of  many, 
perhaps  less  true  economists  than  ardent  reformers,  is  that 
they  place  abundant  production  and  improved  distribution 
as  separate  corollaries,  distinct  results ;  and  think  they 
must  build  up  the  latter  system  by  some  theory  of  social 
bearing  that  is  miraculously  to  solve  the  great  problem  of 
the  division  of  labor's  reward,  the  problem  to  which  these 
theories  owe  their  existence. 

In  connexion  with  the  foregoing,  it  naturally  and 
necessarily  falls  in  the  inquirer's  way  to  consider  the 
subject  of  free  exchange  in  its  general  effect  upon  the 
international  relations  of  all  nations ;  and  in  its  national 
effects  upon  each  country  distinctly.  Both  of  these  ques- 
tions are  inseparably  connected  and  interwoven  with  the 
nature  of  the  question,  as  to  the  bearing  of  free  exchange 
socially  upon  the  industrial  population  of  a  country  in 
ameliorating  their  condition ;  the  loftiest,  the  noblest  end 
towards  which  freedom  in  trade  addresses  itself. 

Free  exchange  is  freedom  of  international  commerce  ; 
the  liberty  for  an  individual  of  any  nation  to  purchase  or 
sell  of  or  to  any  individual  of  any  other  nation,  without  the 
governments  of  those  nations  interfering  in  the  exchange. 
The  question  is  not  merely  to  learn  if  an  import  duty  of 
thirty  per  cent,  will  augment  the  price  of  an  article  thirty 
per  cent.  It  is  to  learn  if  free  trade  between  two  nations 
is  always  advantageous  to  the  two.  The  advocates  of 


THE    QUESTIONS   STATED.  9 

free  trade  say  it  is  so.  It  is  also  to  know  if  free  trade  can 
be  advantageous  to  one  nation  and  injurious  to  the  other. 
The  opponents  of  free  exchange  say  it  can  be.  This 
presents  the  logical  statement  of  the  economic  question  of 
the  national  and  international  relations  of  unrestricted 
exchanges. 

In  urging  the  affirmative  to  the  latter  question,  op- 
position is  principally  kept  up  on  the  ground  of  necessity 
for  protection  to  home  industry,  that  a  nation  may  produce 
certain  articles  within  itself  instead  of  purchasing  them  of 
foreign  nations,  and  retain  the  purchase  money  at  home  to 
put  into  the  pockets  of  its  own  people,  who  are  thus  by 
the  labor  that  creates  all  wealth  to  enrich  themselves,  in- 
stead of  permitting  other  countries  to  grow  wealthy  by 
producing  those  articles  the  purchasing  people  must  needs 
consume.  To  aid  their  efforts  and  emphasize  their  watch- 
word of  encouragement  to  home  industry,  those  advocates 
of  such  protection,  thence  called  protectionists,  have  an 
ally  in  the  national  amour  propre  which  patriotically 
jumps  in  unison  with  the  sound.  This  specious  reasoning, 
false  as  it  is,  deceives  even  in  this  enlightened  age  thou- 
sands of  the  patriotic  and  talented  of  this  and  other 
countries.  Therefore  tariffs  with  so  high  a  rate  of  duties 
as  to  protect  the  home  producer,  are  still  maintained. 
Protect,  maintained !  when  some  one,  or  some  class  is 
protected,  it  is  at  a  cost,  and  some  one,  or  some  class, 
maintains  the  cost.  Who  is  protected,  and  who  pays  the 
cost  ?  Pertinent  questions,  which  it  behoves  every  man 
to  ask,  and  of  which  he  should  seek  the  solution  in  sober 
earnestness  and  with  candid  zeal. 

It  will  be  demonstrated  that  the  protected  are  a  few 
individual  producing  capitalists,  and  that  the  expense  is 

1* 


10  INDUSTRIAL   EXCHANGES. 

borne  by  millions  of  consumers.  The  abolishing  of 
protection  is  then  the  adoption  of  freedom  in  trade ;  and 
the  abundance  which  freedom  of  exchange  promotes  is 
advancing  the  interests  of  all  consumers  of  commodities, 
every  individual  that  eats  of  food  and  wears  of  garments  ; 
the  few  producing  capitalists  only  in  accumulated  fortunes 
gaining  more  by  protection  than  they  would  by  freedom  of 
exchange.  Protection  displaces  wealth,  it  does  not  expand 
and  multiply  it.  Producers  not  specially  protected  lose  by 
protection. 

There  is  a  natural  value  for  all  products,  which  is 
determined  by  the  cost  of  production,  as  made  up  of  the 
profits  of  capital  and  the  wages  of  labor,  and,  to  a  certain 
extent,  of  the  rent  of  land.  Any  legal  impositions  which 
effect  an  increase  of  value  above  this  make  so  much  of 
the  value  artificial.  A  rise  in  the  value  of  certain  pro- 
ducts is  always  in  a  ratio  with  a  corresponding  depreciation 
in  the  value  of  some  other  products,  because  value  is  a 
relative  thing,  and  the  value  of  one  article  is  determined 
by  the  relative  quantity  of  other  articles  it  will  procure. 
There  cannot  be  a  general  rise  in  the  value  of  all  com- 
modities at  once,  although  there  may  be  in  the  money 
price.  As  an  offset  to  the  benefit  accruing  to  the  pro- 
ducers of  the  protected  articles,  there  must  be  a  damage 
to  the  producers  of  all  others. 

Restrictive  laws,  limiting  quantity,  operate  immediately 
through  demand  and  supply  to  raise  the  value.  Also, 
ultimately  through  enhanced  cost  of  production,  the  effect 
of  the  increased  value,  they  operate  to  raise  the  value  of 
the  subsequently  produced  articles.  And  this  ultimate 
effect,  like  the  immediate,  operates  inversely  upon  the 
producers  of  all  non-protected  articles  to  their  injury. 


THE    QUESTIONS   STATED.  11 

The  fallacy  that  has  blinded  men  is  the  apparently 
simple  truth  contained  in  a  theory,  that  directly  to  foster 
special  production  must  promote  general  abundance,  and 
assist  labor.  This  is  plausible,  for  it  seems,  at  first  view, 
as  if  abundance  being  an  immediate  effect  of  production, 
the  true  principle  must  be  to  encourage  that  cause,  to  pro- 
tect the  producer,  and  the  result  of  abundance  would  be 
directly  and  simply  attained. 

The  advocates  of  protection  have  here  had  a  great  ad- 
vantage, as  the  immediate  effect  is  much  more  palpable 
than  the  ultimate.  And  all  persons  would  not  go  beyond 
the  forms  and  phrases,  and  seek  the  elementary  facts  ; 
trace  back  the  question  upon  the  path  of  inquiry,  go  be- 
hind this  theory  of  directly  fostering  the  production  im- 
mediately around  them,  and  inquire  what  policy  is  truly 
calculated  to  promote  the  general  production  the  world  is 
capable  of  affording ;  and  thence  seek  to  know  whose  be- 
nefit is  to  be  sought  and  is  achieved  by  the  abundance 
following  upon  improved  quantity  being  produced. 

The  mass  of  those  favoring  protection  have  been  de- 
ceived by  the  plausible  theory,  and  it  is  only  necessary 
that  they  be  made  to  understand  how  fallacious  is  this  ap- 
parently simple  truth,  in  order  to  effect  a  change  of  sen- 
timent and  action. 

Yet  so  impossible  is  it  to  carry  out  a  wrong  principle  in 
practice  without  its  contradicting  itself,  that  protectionists, 
with  the  inconsistent  blindness  that  pertains  to  error, 
have  denied  themselves  in  practice,  and  shifted  ground  en- 
tirely by  assuming  the  position,  that  protection  does  not 
increase  supply.  This  they  do  when  they  say,  remove 
protection,  and  we  shall  be  inundated  with  the  foreign 


12  INDUSTRIAL   EXCHANGES. 

article,   and  our    manufacturers,   unable   to   compete   on 
equal  terms  with  foreign  labor,  will  be  prostrated. 

Grant  this,  and  the  effect  would  simply  be,  that  a  cer- 
tain quantity  of  labor  would  become  free  from  the  channel 
into  which  it  had  been  artificially  forced,  and  return  to 
its  original  natural  bias,  in  which  direction  it  would  be 
employed  most  profitably.  If  labor  be  left  to  its  natural 
operation,  without  the  imposition  of  unnatural  restrictions, 
the  natural  course  of  production  will  yield  abundance, 
when  cheapness  will  ensue.  But  if  protected,  in  accord- 
ance with  the  wishes  of  each  of  the  various  producers  of 
iron,  cotton,  woollen,  and  other  manufactures  around  the 
circle  of  production,  the  supply  is  diminished  and  prices 
raised. 

Cuba  has  a  hot  climate,  a  necessary  element  to  the 
growth  of  pineapples,  and  produces  them,  with  the  aid  of 
this  natural  advantage,  so  that  they  are  imported  and  pro- 
fitably sold  in  the  New  York  market  for  one  dollar  the 
dozen.  A  company  of  individuals  here  conceive  the  idea  of 
entering  into  the  business  of  producing  pineapples.  They 
build  extensive  hothouses,  with  a  large  outlay  of  capital, 
in  order  artificially  to  obtain  from  the  rays  of  our  northern 
sun  that  heat  which  he  furnishes  gratuitously  in  Cuba.  Of 
course  the  capital  invested  must  yield  an  interest,  or  the 
company  cannot  sustain  itself.  In  order  to  make  the  bu- 
siness pay,  the  producers  must  get  five  dollars  per  dozen 
for  their  pineapples,  and  they  ask  the  government  to  levy 
a  duty  of  four  dollars  per  dozen  on  imported  pineapples, 
to  protect  them  in  their  production.  It  is  done;  and  pine- 
apples, that  before  were  to  be  bought  for  one  dollar  per 
dozen,  are  not  now  to  be  had  for  less  than  five.  Thou- 


THE    QUESTIONS   STATED.  13 

sands  who  had  previously  indulged  in  the  luxury  of  this 
delicious  fruit  are  now  unable  to  afford  its  use.  The  con- 
sumption is  reduced  to  a  mere  fraction  of  its  former 
amount,  and  scarcity  of  the  article  prevails  where  before 
was  abundance. 

This  is  the  precise  operation  of  the  protective  tariff  upon 
all  commodities.  Substitute  coffee  and  tea  for  the  sup- 
posed pineapples,  and  the  effect  is  the  same.  But  how 
much  more  painfully  would  a  people  feel  the  effect  of  the 
deprivation  of  these,  as  they  'have  become,  necessaries  of 
life  !  Such  is  its  daily  operation  upon  the  various  neces- 
saries of  cloths,  hardware,  and  a  thousand  articles  of  daily 
consumption,  imported  from  abroad  and  made  at  home, 
and  sold  to  the  population  of  consumers  at  a  price  en- 
hanced, though  not  fourfold  as  in  the  supposed  case  of 
the  pineapples,  yet  to  a  greatly  advanced  cost  to  them,  in 
proportion  as  they  are  now  even  under  a  low  tariff  pro- 
tected by  our  25,  30,  40,  and  100  per  cent,  duties. 

Protection  is  the  hothouse  growth — freedom  of  exchange 
the  natural  production. 

Both  systems  have  their  supporters. 

What  is  the  key  to  unlock  the  truth  that  lies  within  the 
science  of  industry  ?  Consumption  ! 


I  B  R  A  K  i 


II. 


CONSUMPTION. 

THERE  are  given  to  man  three  agents,  from  the  com- 
bined action  of  which,  all  of  man's  production  has  birth. 
These  are  Land,  Capital,  and  Labor.  Land,  the  natural 
agent,  yields  rent;  Capital,  the  acquired  agent,  yields 
profit ;  and  Labor,  the  active  agent,  yields  wages. 

These  three  agents  of  Land,  Capital,  and  Labor, 
operate  in  producing  three  results.  These  are  Produc- 
tion, Exchange,  and  Consumption. 

These  three,  then,  are  the  elements  of  man's  action, 
and  it  is  always  in  the  medium  of  these  elements 
that  he  must  develope  himself.  Of  these,  one  is  original, 
one  intermediary,  and  the  third  final.  There  must 
be  cause,  action,  and  result.  These  three  are  all ; 
no  other  elements  exist  in  keeping  up  the  physical  life 
of  man. 

Production  is  the  cause,  exchange  the  action,  and 
consumption  the  effect,  the  end,  and  the  object  •  it  is  what 
sustains  the  life  of  man;  and  as  every  effect  assumes  the 
nature  of  a  cause,  this  repropels  new  effort. 

Man  therefore  produces  in  order  to  consume ;  and 
consumes  to  his  enjoyment  and  development  in  due 
proportion  to  the  extent  of  the  exchanges ;  because  the 


CONSUMPTION.  15 

world  has  varied  natural  advantages  for  furnishing 
variety  of  production,  ministering  to  a  variety  of  wants. 

Production,  Exchange,  Consumption,  is  the  industrial 
formula. 

Man  labors  in  order  to  consume.  Consumption  being 
the  object,  it  is  the  interest  of  the  consumer  that  the 
economist  should  study  to  promote.  Production  is  the 
means ;  if  he  limits  his  view  to  the  means,  his  exertions 
to  its  promotion,  without  looking  forward  to  the  end,  he 
may  come  very  far  short  of  a  wise  action. 

Looking  then  to  the  interest  of  the  consumer,  what 
enhances  prices  to  him  ?  The  labor  of  production,  the 
carriage,  the  profits  of  the  capital  employed,  and  the  duty 
or  tax.  These  are  all  equally  his  antagonists,  they  all 
stand  in  the  way  of  his  attaining  wealth,  education,  all 
enjoyments  physical  and  mental.  In  proportion  as  he 
succeeds  in  overcoming  them,  his  enjoyments  are  mul- 
tiplied ;  and  therefore  man  is  ever  striving  against  them. 

He  strives  successfully  against  the  labor  of  production, 
the  first  antagonist  named,  and  he  is  benefited  by  his 
success.  Suppose  the  agriculturists  of  a  country  have  as 
yet  no  other  means  of  tilling  the  soil  than  by  the  spade. 
After  a  time,  however,  the  instrument  called  a  plough 
is  invented.  With  this  machine  and  a  horse  one  man  can 
perform  as  much  labor  of  cultivation  as  was  before  done 
by  four  men  with  the  spade.  Then  the  production  is  more 
than  doubled  in  proportion  to  the  labor.  This  antagonist 
is  so  far  overcome,  and  whereas  before  he  could  only 
during  the  season  of  growing  vegetation  cultivate  the 
potatoes  necessary  to  his  consumption,  he  can  now  add  a 
field  of  corn,  and  thence  he  rejoices  in  the  addition  of 


16  INDUSTRIAL    EXCHANGES. 

another  dish  to  his  table,  an  additional  necessary  of  life 
is  brought  within  his  reach. 

The  next  antagonist  to  vanquish  is  the  carriage,  or 
transportation.  The  plough  has  benefited  others  as 
well  as  himself.  A  surplus  of  corn  can  be  spared  to  be 
exchanged  with  an  individual  of  a  neighboring  country 
for  a  coat.  This  neighbor  enjoys  advantages  peculiar  to 
this  fabrication  for  making  coats  that  our  man  who  enjoys 
his  plough  does  not,  and  vice  versa  of  his  corn. 

A  third  individual  plies  with  help  of  another  a  two- 
oared  boat  that  navigates  a  stream,  upon  whose  banks, 
though  at  a  distance,  both  the  man  of  corn  and  the  man  of 
coats  live.  He  goes  back  and  forth,  and  carries  their 
commodities  for  each,  charging  them  a  certain  sum 
therefor.  Soon  he  invents  a  sail,  and  then  finds  he  can 
perform  his  voyages  without  the  assistant,  the  wind  doing 
the  propelling,  for  which  he  depended  previously  upon  the 
oars.  The  cost  of  carriage,  therefore,  is  reduced  to  him, 
and  thence  after  a  short  time  to  the  men  of  coats  and  corn, 
for  if  he  does  not  lower  his  price  the  owner  of  another 
boat,  having  assumed  the  sail,  enters  into  competition  with 
him  and  forces  him  to  the  reduction.  The  man  of  corn, 
getting  his  coats  cheaper,  can  now  afford  to  add  a  vest. 
And  again  he  rejoices  in  the  consumer's  victory  over  his 
natural  antagonist. 

The  next  with  which  he  contends  is  the  profits  of  the 
man  of  coats  and  the  man  of  boats.  With  the  latter  he 
has  already  succeeded  to  the  extent  of  the  gain  of  the 
sail,  and  conquered  monopoly.  His  trade  with  them  has 
increased  so  largely,  with  his  growing  family,  that  he 
believes  they  can  afford  to  labor  for  smaller  profits,  and 


CONSUMPTION.  17 

will  make  up  in  quantity  what  is  reduced  in  rate.  He  is 
convinced  of  it  when  others  are  ready  to  enter  into 
competition  with  these,  and  if  it  can  be  done  by  any  one 
for  less,  he  effects  the  gain  of  a  reduction,  and  again 
rejoices  in  a  victory. 

But  another  enemy  appears  upon  the  field,  and  he  must 
still  contend  with  opposition.  A  power  holds  sovereign 
sway  over  the  country,  and  wants  a  revenue  to  enable  it 
to  protect  its  subjects.  Upon  the  line  of  division  between 
the  countries  of  the  men  of  coats  and  corn,  and  on  the 
bank  of  the  stream,  it  builds  a  fort  and  plants  a  battery ; 
and  whenever  the  man  of  boats  passes  with  his  freight, 
under  penalty  of  a  destructive  broadside,  he  must  deposit 
a  sum  of  money  equivalent  to  one-tenth  the  value  of  the 
commodities.  It  is  added  of  course  to  their  cost  to  the 
man  of  corn.  He  likes  not  taxes,  but  as  he  loves  his 
country  and  is  conscious  of  the  protection  afforded  him  by 
her  laws,  he  pays.  •  But  a  neighbor  has  a  fancy  to  make 
coats,  and  being  unable  to  do  so  as  cheaply  as  the  original 
man  of  coats,  he  comes  to  the  conclusion  that  if  he  can  get 
the  sovereign  power  to  force  the  man  of  corn  to  pay  one- 
fourth  more  than  heretofore  for  his  coats,  he  will  then  be 
able  to  sell  of  his,  as  at  that  enhanced  price  or  one  a  little 
lower  he  can  make  and  sell  for  a  large  profit,  and  thus 
grow  rich  off  the  necessities  of  the  man  of  corn,  who  must 
consume  more  or  less  of  clothing  annually.  The  sovereign 
power  grants  his  request,  arbitrarily  unjust  as  it  may  seem 
and  is,  and  effects  the  purpose  by  adding  to  the  duty  and 
exacting  a  tariff  tax  more  than  doubled.  The  sovereign 
power  is  no  gainer,  however,  for  the  quantity  that  comes 
in  is  much  less,  and  the  revenue  is  perhaps  even  reduced 


18  INDUSTRIAL    EXCHANGES. 

in  total  amount.  Commodities  diminish  instead  of  growing 
more  abundant,  as  they  had  been  previously. 

Will  the  man  of  corn,  the  consumer,  now  cut  off  from 
enjoying  his  full  amount  of  raiment,  and  obliged  to  pay  an 
enhanced  price  for  what  he  uses,  succeed  in  defeating  this 
new  and  formidable  antagonist  ?  We  know  not,  but  we 
pray  for  his  success,  and  ask  it  in  the  name  of  Justice. 

The  same  proceedings  in  all  their  steps,  all  these  con- 
tests, have  transpired  with  the  man  of  coats  as  well  as 
with  the  man  of  corn.  A  double  victory,  or  a  double 
defeat,  is  therefore  to  be  achieved.  And  these  men  of  corn 
and  coats  represent  each  the  millions  of  their  kind  with 
which  each  country  is  teeming — the  consuming  millions — 
represent  consumption. 

We  may  readily  see  that  it  is  not  the  producer,  but  the 
consumer,  nature  seeks  to  benefit :  that  upon  the  latter 
determine  all  the  beneficial  effects  of  all  nature's  gifts  and 
of  man's  labor.  We  may  trace  the  operation  of  this  law 
in  the  illustration  furnished  by  the  invention  of  the  sail  by 
the  man  of  boats,  who  was  at  first  enabled  to  make  greater 
profits,  because  of  the  reduction  of  labor  it  effected.  This 
continued  so  long  as  he  could  get  the  same  high  price  for 
his  transportation.  So  long  he,  the  producer,  was  the  pro- 
fited ;  but  soon  competition  stepped  in  to  play  its  part,  and  he 
must  reduce  his  prices,  and  receive  payment  for  his  labor 
only  ;  from  that  moment  the  benefit  of  the  invention  began 
to  enure  to  the  men  of  corn  and  of  coats — the  consumers. 
This  gift  of  providence,  the  river,  this  result  of  man's  labor 
and  skill,  the  sail,  have  subserved  their  purpose  decreed 
by  the  Divine  Wisdom,  and,  through  the  agency  of  com- 
petition, they  have  become  the  gratuitous  enjoyments  of 


CONSUMPTION.  19 

the  consuming  numbers,  and  are  not  retained  for  the 
benefit  of  a  producing  class.  They  have  effected  cheapness, 
the  certain  result  of  labor  and  competition. 

But  if  the  agency  of  competition  is  excluded  from  the 
field  of  man's  action,  the  result  of  his  labor  would  not  be 
cheapness,  that  dissemination  of  enjoyments  among  the 
consuming  numbers. 

Ah  I  this  fourth  antagonist,  what  is  the  part  he  plays  in 
the  great  game  of  labor  striving  to  achieve  cheapness  ? 

Had  the  man  of  boats  sought  and  gained  protection  in 
the  enactment  of  a  law  by  the  sovereign-  power  that  should 
lay  a  heavy  tax  on  all  the  labor  of  navigation,  attempted 
to  be  performed  by  others  who  would  fain  enter  into  com- 
petition with  him,  like  to  the  tax  imposed  upon  the 
products  of  the  labor  of  the  foreign  man  of  coats  to 
protect  the  domestic  man  of  coats,  there  would  have  been 
no  competition  in  the  transportation,  and  no  consequent 
gain  of  cheapness  to  the  men  of  coats  and  corn.  The 
rejoicings  over  that  third  victory  would  never  have 
transpired. 

We  now  see  that  the  business  of  this  fourth  antagonist 
is  to  keep  off  competition,  and  to  withhold  it  from  stepping 
in  between  production  and  consumption  to  benefit  the 
latter.  This  dire  antagonist  operates  always  against  the 
law  of  Divine  Wisdom,  counteracting  the  operation  of  the 
law  establishing  the  tendency0of  all  the  results  of  labor  to 
percolate  throughout  the  entire  domain  of  consumption. 

Again  we  will  pray  for  success,  and  this  time  in  the 
name  of  the  Divine  Law  ! 

All  of  the  antagonists  stand  in  the  way  of  abundance, 
which,  if  encouraged,  as  we  have  seen,  by  their  defeat, 
promotes  an  exchange  between  countries  of  their  increased 


20  INDUSTRIAL    EXCHANGES. 

productions,  adding  new  comforts  and  luxuries.  Each 
country  acquires,  assumes,  with  the  victory  over  these 
antagonists,  the  advantages  the  other  enjoys  through  its 
peculiarity  of  climate,  population,  soil,  &c.,  diminished 
only  by  the  cost  of  transportation.  There  is  a  distribu- 
tion of  the  natural  advantages  possessed  by  all,  and  a 
general  equalization,  provided  always  that  the  last 
antagonist  be  subdued  as  completely  as  the  others  ;  and  to 
the  advantages  and  disadvantages,  the  benefits  and  evils  of 
victory  or  defeat,  in  the  contest  with  this  enemy  of  con- 
sumption, we  shall  address  ourselves.  Victory  is  Free 
Trade,  defeat  is  Protection. 

What  are  the  gains  of  victory  ?  and  what  the  losses  of 
defeat ! 

Meantime  we  will  transport  ourselves  ta  the  sandy 
plains  of  Egypt.  Seeking  to  behold  its  mighty  works  of 
art,  we  find  the  lofty  pyramid  of  Gizeh  submerged,  its 
apex  only  visible  above  the  dark  and  slimy  waters  of  the 
overflowing  Nile.  Soon  the  receding  waters  leave  exposed 
to  view  a  constantly  enlarging  base,  receiving  their  depo- 
sits, and  upon  which  we  see  increasing  numbers  of 
minute  and  active  insects  that  thickly  people  its  sides, 
expanding  with  each  recession  of  the  waters  towards  the 
pyramid's  broad  base.  Society  is  like  this  pyramid  ;  the 
reduction  of  a  tariff  brings  the  commodities  on  which  it 
has  been  levied  within  the^reach  of  greater  numbers  of 
those  occupying  lower  positions  on  the  pyramid,  whose 
numbers,  increasing  rapidly  with  the  descent,  augment 
consumption  in  a  ratio  with  the  receding  waters  of  the 
commodity-laden  tariff. 


III. 


CAPITAL. 

IN  order  to  understand  more  clearly  the  value  of  the 
objections  urged  against  free  trade,  it  is  necessary  to 
review  the  economical  principles  immediately  governing 
the  action  of  the  three  agents  of  production,  so  far  as  they 
are  connected  with  the  operations  of  free  trade. 

The  agent  Capital  induces  the  production  of  commodi- 
ties. It  is  falsely  supposed  that  to  protect  a  country's 
manufactures  is  a  means  of  increasing  its  capital,  of 
strengthening  the  productive  power  of  its  labor.  Capital 
regulates  the  amount  of  labor;  there  will  be  no  more 
labor  than  there  is  capital  to  employ,  since  labor  subsists 
on  the  capital  already  produced  and  accumulated.  There- 
fore there  can  be  no  more  industrial  effort  engaged  in 
production  than  there  is  capital  to  supply  it  with  materials, 
instruments,  and  support.  Yet  in  disregard  of  a  fact  so 
evident,  says  Mr.  Mill,  "  it  long  continued  to  be  believed 
that  laws  and  governments,  without  creating  capital, 
could  create  industry.  Not  by  making  the  people  more 
laborious,  or  increasing  the  efficiency  of  their  labor  ;  these 
are  objects  to  which  the  government  can  in  some  degree 
contribute.  But  when  the  people  already  worked  as  hard 
and  as  skilfully  as  they  could  be  made  to  do,  it  was  still 


22  INDUSTRIAL   EXCHANGES. 

thought  that  the  government,  without  providing  additional 
funds,  could  create  additional  employment.  A  govern- 
ment would,  by  prohibitory  laws,  put  a  stop  to  the  im- 
portation of  some  commodity,  and  when  by  this  it  had 
caused  the  commodity  to  be  produced  at  home,  it  would 
plume  itself  upon  having  enriched  the  country  with  a  new 
branch  of  industry,  would  parade  in  statistical  tables  the 
amount  of  produce  yielded  and  labor  employed  in  the 
production,  and  take  credit  for  the  whole  of  this  as  a  gain 
to  the  country,  obtained  through  the  prohibitory  law. 
Although  this  sort  of  political  arithmetic  has  fallen  a 
little  into  discredit  in  England,  it  still  flourishes  in  the 
nations  of  continental  Europe!"  And  I  regret  to  say  is 
a  cherished  object  of  governmental  policy  with  a  large 
number  of  American  economists. 

The  enlarged  product  of  the  joint  exertions  of  labor  and 
capital  is  devoted  to  two  purposes.  A  portion,  consisting 
of  the  accumulations,  being  added  to  capital,  and  the 
remainder,  save  what  goes  to  account  of  rent  and  taxes, 
consumed  in  feeding  and  clothing  labor,  providing  instru- 
ments and  supplying  their  wear  and  tear,  furnishing 
labor  with  the  fuel — after  Lieber,  who  considers  the  food 
sustaining  the  body  as  fuel  consumed  in  keeping  up  the 
principle  of  life — which  feeds  new  production.  As  far 
as  abstinence  is  practised  and  the  product  left  uncon- 
sumed,  capital  accrues,  and  though  to  abstain  from  the 
enjoyment  is  contrary  to  instinct,  yet,  being  necessary  to 
existence,  it  will  be  practised,  and  capital  will  continue 
generally  to  increase  without  limitation,  the  rate  of 
increase  being  governed  by  facilities  and  intellectual 
progress. 

Perhaps  it  would  be  more  strictly  correct  to  say  that 


CONSUMPTION. 


23 


capital  is  devoted  to  one  sole  purpose,  consumption.  This 
consumption  is  of  two  kinds,  productive  and  unproductive. 
The  first  is  the  food-fuel,  that  feeds  reproduced  life  ;  the 
last  the  fuel  which  is  consumed  in  the  flame  that  leaves 
naught  but  smoke  and  ashes.  The  first,  the  accumulated 
surplusage  over  the  consumption  that  transpired  in  the  pro- 
duction obtained,  must  in  turn  be  consumed  next  season  or 
soon  thereafter,  if  it  is  not  this  ;  and  therefore  these  gains 
of  abstinence  are  short  lived,  but  they  leave  a  progeny  en- 
larged in  progressive  proportion  to  their  own  bulk.  Capi- 
tal, then,  is  produce  devoted,  when  properly  appropriated, 
to  reproducing  itself. 

It  consists  of  both  the  consumable  commodities  com- 
posing circulating  capital,  and  of  the  more  permanent 
improvements,  such  as  railways,  canals,  fences,  machinery, 
buildings,  &c.,  constituting  fixed  capital.  The  employ- 
ment of  industry  in  production  is  more  especially  ad- 
vanced by  the  increase  of  the  circulating  than  of  the  fixed 
capital ;  nevertheless,  the  latter  does  finally  add  to,  and 
greatly  augment  industrial  action,  through  enhanced  cheap- 
ness effected  by  the  use  of  the  machinery,  improved  trans- 
portation, &c.,  increasing  consumption,  and  calling  for 
additional  industrial  effort  to  meet  the  growing  demands  of 
enlarged  consumption. 

In  calling  for  new  industrial  effort  capital  is  the  imme- 
diate antecedent  of  industry,  but  the  direction  of  the  effort 
indicating  what  shall  be  produced  is  determined  by  the 
demand  of  consumption,  for  whose  sake  all  the  joint 
action  of  capital  and  effort  is  undertaken  ;  and  in  turn  the 
existence  of  this  capital  is  consequent  upon  that  demand 
opening  markets,  and  thereby  inciting  production  and  a 
saving  between  the  amount  of  products  and  of  cohsump- 


24  INDUSTRIAL   EXCHANGES. 

tipn,  in  order  to  gain  more  capital  for  further  profitable 
employment  of  labor  in  producing  for  the  enlarged  mar- 
kets of  increasing  consumption. 

The  employment  of  industry,  therefore,  being  imme- 
diately and  effectively  advanced  by  the  increase  of  circu- 
lating capital,  it  is  apparent  that  whatever  facilitates  such 
circulation,  and  adds  to  the  sum  of  such  capital,  is  advan- 
tageous. If  there  was  no  exchange  of  commodities,  nor 
any  money,  the  value  of  labor  would  be  the  same,  capital 
being  equal  in  both  cases.  But  exchange  operates  to 
increase  capital  through  the  opening  of  markets  stimulating 
industry  to  production,  and  enabling  it  to  act  most  effectu- 
ally in  consequence  of  each  country  producing  that  it  is 
qualified  to  produce  cheapest,  and  the  increase  is  a  sound 
and  permanent  production.  The  cost  of  subsistence  is 
lessened,  a  wider  margin  is  left  for  accumulation,  and 
capital  augments. 

The  introduction  of  a  facility  of  production,  a  cheapen- 
ing agent,  increases  the  sum  of  capital  and  the  sum  of 
profits,  the  rate  remaining  as  before.  The  gross  sum  of 
wages  is  increased,  which  prevents  the  rate  of  profits  from 
rising.  Labor  gains  through  the  sum  of  exertion  it  ex- 
pends bringing  an.  enlarged  sum  of  wages.  Hence  the 
consequence  of  the  increased  production  afforded  by  a 
facility  is  improved  distribution.  Certainly  all  consumers 
profit,  but  it  seems  to  be  necessary  that  the  rich  be  per- 
mitted to  add  to  their  luxuries  if  an  equivalent  addition  of 
necessaries  falls  to  the  lot  of  the  poor.  The  inducement  to 
accumulate,  which  increase  of  means  generates,  will 
cause  wealth  to  add  to  its  capital  in  order  to  work  new 
mines  of  production,  and  this  increase  of  employing  capi- 
tal is  for  labor's  benefit.  Consequently  the  profitable  use 


CAPITAL.  25 

will  tend  to  add  more  largely  to  the  necessaries  of  poverty 
than  the  luxuries  of  wealth.  This  inducement  is  also 
natural  to  the  poorer  classes,  and  when  the  most  urgent 
wants  are  supplied  there  is  a  certain  point  beyond  which 
they  will  begin  to  accumulate  and  form  capital  of  their 
own. 

Consumption  produces.  It  does  not  follow,  therefore, 
because  capital  is  the  immediate  cause  of  production,  that 
it  is  not  consumption  to  which  we  should  look  in  seeking 
for  a  cause  operating  to  effect  increase  of  wealth  and  en- 
joyments for  mankind.  It  is  still  consumption  that  holds 
in  its  grasp  the  motive  power  to  industry,  and  whatever 
measures  of  governmental  policy,  whatever  improvements 
of  machinery  tend  to  bring  within  the  reach  of  larger 
consuming  numbers  additional  quantities  of  commodities, 
are  increasing  capital  and  its  power  to  employ  industry. 
The  additional  commodities  are  themselves  additional 
wealth  for  the  time,  in  the  hands  of  the  people  ;  of  each 
article  some  will  consume  all,  some  save  a  portion,  or  its 
equivalent,  in  some  form  ;  some  consume  unproductively, 
and  some  productively.  The  greater  the-  quantity  of 
consumable  commodities  in  their  possession,  the  more  of 
saving  must  ensue,  as  well  as  more  of  enjoyments  in  con- 
suming. 

In  the  United  States,  although  the  spirit  of  accumulation 
is  active,  and  capital  is  increasing,  the  counter  agency  of 
abundant  fertile  land,  relatively  large  in  proportion  to  the 
population,  furnishing  increasing  supply  of  food,  without 
the  necessity  of  employing  additional  labor  upon  a  given 
amount  of  land,  keeps  nearly  even  pace  with  them,  and 
prevents  profits  and  interest  from  falling  to  a  very  low 
rate.  Yet  there  is  a  constant  approximation  towards  the 


26  INDUSTRIAL    EXCHANGES. 

point  when  excessive  population  and  occupied  lands  fit  for 
cultivation  shall  meet,  when  increased  labor  must  be 
employed  to  the  acre  in  order  to  produce  additional  returns 
beyond  those  obtained  at  present,  which  will  then  be 
insufficient.  The  space  between  the  counteracting  agencies 
is  narrowing,  even  in  this  country,  although  the  great 
amount  of  unoccupied  land  renders  the  movement  imper- 
ceptible. Whether  the  point  of  meeting  ever  be  reached 
or  not,  improvements  in  production,  including  all  natural 
facilities,  should  be  permitted  to  lend  all  their  aid  to  the 
cause  of  profits  and  wages,  to  keep  up  the  producing  and 
remunerating  power  of  capital  relatively  to  its  amount, 
and  in  order  that  the  foundations  already  laid  for  a  high 
standard  of  habits  and  acquirements  in  the  people,  may 
not  be  impaired.  If  these  be  cultivated  in  equal  progres- 
sion with  the  approach  of  the  future  time  of  land's  absorp- 
tion by  excessive  population  covering  its  quantity  and 
capacity,  they  check  its  advance  to  prevent  the  stationary 
state  not  only  from  being  reached,  but  being  neared,  until 
the  requirements  of  all  the  people  shall  have  become  per- 
manently habituated  to  a  high  degree  of  physical,  intel- 
lectual, and  moral  acquisition  or  attainments. 

It  appears  that  capital  and  labor  (which  is  the  growth 
of  population)  are,  under  the  progressive  operation  of  the 
production  and  consumption  which  are  so  materially 
assisted  by  improvements  in  physics,  subject  in  themselves 
to  no  limitation  ;  but  so  long  as  land  will  yield  sufficient 
produce  for  constantly  increasing  consumption,  these  two 
agents  of  production  will  never  cease  augmenting  their 
forces. 


LIBRARY 

rNlVERSITY   OF 

CALIFORNIA., 


IV. 


LAND. 

How  does  free  trade  affect  land,  the  natural  agent  of 
production  ? 

The  limit  of  production  falling  finally  only  upon  land — 
capital  and  labor  being  capable  of  indefinite  extension — it 
is  essential  that  the  capacity  of  land  should  be  assisted  in 
its  development,  in  order  that  supplies  for  sustaining  in- 
creasing population  may  increase  in  a  ratio  sufficiently 
great  to  advance  further,  and  still  further  forward,  the  time 
when  population  may  have  so  far  attained  to  a  numerical 
force  as  to  excel  the  capacity  of  land  for  producing  food  ; 
in  which  event  a  necessary  reduction  of  mouths  would 
ensue  through  the  agency  of  famine. 

Free  trade  would  assist  such  development  in  bringing 
together  the  nations,  through  the  incitement  of  the  markets 
afforded  by  each  to  each  ;  and  causing  the  effectual  deve- 
lopment by  each  of  its  own  most  hidden  and  distant  re- 
sources, in  reclaiming  wastes,  and  improving  its  methods  of 
cultivation.  And  not  alone,  each  nation  within  its  own 
borders  ;  through  the  probing  effected  by  commerce,  regions 
remaining  otherwise  unexplored  and  undeveloped,  would, 
by  other  nations,  be  colonized,  reclaimed,  and  improved. 
These  effects  of  free  trade  would  operate  until,  like  the 


28  INDUSTRIAL    EXCHANGES. 

Pays  de  Waes  in  Flanders,  an  originally  barren  soil,  they 
would  become  the  most  productive. 

A  gain  is  achieved  in  the  free  introduction  of  articles  of  food 
into  other  countries  than  those  in  which  they  can  be  pro- 
duced, and  which  can  be  produced  from  land  in  one  coun- 
try and  transported  to  another,  cheaper  than  the  articles  of 
food  previously  cultivated  and  consumed  in  the  importing 
country.  The  demand  for  the  foreign  consumption,  added 
to  that  for  domestic,  stimulates  to  enlarged  production  call- 
ing  for  improved  cultivation  ;  and  the  cheaper  article  of 
food  soon  supplies  the  place  in  several  countries  of  a  pre- 
viously used  dearer  one.  In  this  case  land  has  received 
a  new  development,  and  the  period  of  conjunction  between 
consumption  of  food  and  land's  capacity  for  production, 
supposing  it  to  have  been  approached,  is  postponed.  We 
are  now  witnessing  the  working  of  this  process  in  the  in- 
troduction of  our  Indian  corn  into  Great  Britain,  where  it 
cannot  be  grown,  and  is  supplanting,  to  a  certain  extent, 
the  use  of  wheat. 

The  improvements  in  preparing  soils,  in  instruments  of 
husbandry,  all  of  which  are  advanced  by  the  cheapening 
of  commodities,  and  of  the  cost  of  these  implements,  &c., 
effect  an  increase  of  development  from  the  land.  These, 
and  the  improvements  in  roads  and  means  of  getting  agri- 
cultural produce  to  market,  are  cheapening  processes  to 
which  free  trade  is  analogous ;  and  it  is  therefore  directly 
instrumental  in  increasing  the  production  from  a  given 
amount  of  land.  A  single  reference  to  the  chapter  on  con- 
sumption, and  to  the  contrary  effects  of  the  imposition  of 
the  protective  duty,  and  the  application  of  the  sail  experi- 
enced by  the  men  of  corn  and  coats,  will  suffice. 

In  effecting   a   more  general  division  of  property,  an 


•         LAND.  29 

equalization  that  cuts  down,  or  rather  prevents  the  growth 
of  the  large  fortunes  and  estates  that  protection  fosters, 
free  trade  assists  in  bringing  the  cultivation  of  land  under 
the  dominion  of  smaller  proprietorships,  which  effects  a 
greater  proportion  of  production  to  the  labor  expended, 
than  is  achieved  under  the  larger. 

By  the  increase,  through  the  introduction  of  a  new 
facility  of  production,  of  the  sum  of  consumable  com- 
modities distributed  throughout  the  community,  increasing 
the  totals  of  capital,  profits  (though  not  the  rate  of  profits), 
and  wages,  land,  capital,  and  labor  all  are  benefited.  But 
the  improvements,  so  far  as  they  facilitate  the  production 
of  food,  effect  a  reduction  of  rent.  Upon  the  whole,  the 
gain  lies  with  only  capital  and  labor,  in  their  capacity  of 
producers — with  capital  in  gross,  and  not  in  rate,  and  with 
labor  in  both  gross  sum  and  rate — but  all,  including  land, 
gain  as  consumers.  Here  we  have  the  economical  theorem, 
which  is  at  the  root  of  the  confusion  of  ideas  prevalent  in 
this  country,  upon  the  subject  of  free  trade.  In  the 
United  States,  the  facility  of  abundant  fertile  lands 
operates  economically  in  the  same  manner  as  a  reduction 
of  the  tariff.  Both  lower  rent,  the  gain  of  the  monopoly 
of  land  ownership  in  the  previously  cultivated  sections. 
It  is  probably  an  apprehension,  more  or  less  distinct,  of  the 
fact  that  these  are  co-operating  facilities,  leading  to  the 
conclusion  that  the  abundance  of  land  (upon  which  the 
producing  laborer  is  usually  settled  as  landlord,  relieving 
productions  of  a  call  for  rent)  is  sufficient  for  the  food  pro- 
ducing branch  of  our  economical  policy,  without  the  addi- 
tion of  the  profit  of  another  facility,  that  causes  many, 
looking  around  upon  our  bounteous  harvests,  to  seize  upon 
an  assertion  that  we  already  produce  more  food  than  we 


30  INDUSTRIAL    EXCHANGES. 

can  consume  or  sell,  and  use  it  as  an  argument  against 
free  trade.  It  is  true  that  we  produce  more  than  we  can 
consume  ;  but  the  premiss,  as  far  as  it  denies  our  ability 
to  sell  all  we  produce,  can  be  disproved.  In  England, 
the  population  increases  at  the  rate  of  a  thousand  per  day. 
The  production  of  food  progresses  very  slowly,  the  in- 
dustrial development  being  principally  in  manufactures. 
There  are  no  statistics  of  the  amount  of  food  produced, 
and,  therefore,  in  order  to  determine  what  is  the  increase 
of  the  consumption  over  production,  it  is  necessary  to 
compare  the  quantities  imported  with  the  range  of  har- 
vests for  series  of  years,  from  which  may  be  drawn  con- 
clusions respecting  the  probable  future  demand. 

The  year  1841  had  been  immediately  preceded  in 
Great  Britain  by  three  years  of  short,  and  one  of  barely 
average  crops.  In  that  year  the  imports  of  grain  were 
3,258,698  qrs.,  and  1,275,656  cwt.  of  flour.  The  year 
1848  was  preceded  by  the  good  crops  of  1847,  and  the 
imports  for  the  eight  months  to  Sept.  5th,  were  3,193,928 
qrs.  of  grain,  and  643,192  cwt.  of  flour.  As  much,  and 
50  per  cent,  more,  is  now  required  for  consumption  be- 
yond the  production  than  was  required  seven  years  ago,  as 
the  difference  between  the  production  in  a  season  of  short, 
and  in  one  of  abundant  crops.  In  a  season  of  short  crops, 
the  demand  for  consumption  was  over  three  millions  of 
quarters  more  than  the  production  of  the  country  ;  now 
the  excess  is  over  four  millions.  Three  millions  having 
been  then,  in  1841,  all  that  a  short  crop  lacked  of  meet- 
ing the  demand  of  consumption,  a  full  crop  would  have 
about  met  the  demand,  as  appears  by  the  fact  that  the  last 
preceding  abundant  year  of  1836,  the  importation  was 
about  800,000  qrs.  The  increase  of  the  demand  for  con- 


LAMD.  31 

sumption  over  the  production  for  seven  years  past  has 
therefore  been  the  full  amount,  less  800,000  qrs.,  of  the 
importation  in  1848,  which  is  about  three  and  a  half  mil- 
lions of  quarters.  This  is  equal  to  an  average  increase 
of  consumption  over  production  of  half  a  million  quarters 
of  grain  per  annum.  Upon  the  past  gain  of  consumption 
outstripping  her  production,  may  be  predicated  calcula- 
tions of  a  future  progression  of  gain,  growing  out  of  the 
increase  of  population,  and  the  free  trade  measures,  which 
turn  the  industry  of  Great  Britain  into  manufacturing 
channels — much  of  it  in  working  our  raw  cotton — where 
there  is  a  wider  field  for  expansion  than  in  agriculture,  her 
limited  acres  and  dense  population  allowing  but  little  or  no 
margin  for  additional  employment  of  her  abundant  capital, 
and  for  increased  production  in  that  branch  of  industry. 

The  loss  of  the  potatoe  as  an  article  of  food,  which  appears 
to  be  the  probable  ultimate  result,  and  the  substitution  of 
our  corn  is  to  increase  the  demand  upon  this  country.  The 
price  of  wheat  in  1828  was  sixty  shillings,  with  a  scarce 
crop ;  in  1847,  eighty-three  shillings ;  the  rise  following 
two  successive  years  of  failure  in  the  potatoe  crop.  Indeed, 
upon  the  whole,  it  appears  that  Great  Britain  is  much 
further  behind  the  point  of  feeding  her  population,  by  the 
production  of  her  agriculture,  than  she  was  twenty  years 
since ;  and  that  the  annually  increasing  population  of 
England,  as  it  has  done  for  a  series  of  years,  will  continue 
to  demand  an  annually  increasing  supply  of  imported  food. 
The  ignorance,  the  inefficiency  of  their  labor,  and  the  non- 
existence  of  the  most  superior  agricultural  improvements, 
and  the  incompetency  to  gain  or  apply  them,  must  keep  the 
corn  exporting  countries  of  Poland,  Russia,  and  Hungary, 
for  centuries  to  come  behind  this  country,  where  the  pro- 


32  INDUSTRIAL   EXCHANGES. 

ducers  are  exempt  from  rent  and  taxes,  have  superior 
facilities  and  intelligence,  in  the  ability  to  furnish  the 
supplies  demanded.  Our  population  increases  rapidly, 
as  much  so  as  our  capital ;  and  the  margin  is  scarcely  wide 
enough  between  the  growth  of  capital  and  that  of  a  con- 
suming  population  treading  upon  its  heels,  to  allow  of  this 
country  so  far  developing  the  resources  of  its  almost 
boundless  fields,  as  to  furnish  the  supply  of  food  called  for 
by  existing  demand  from  abroad,  and  by  the  growth  of 
demand  ready  to  respond  in  terms  of  acceptance  to  a 
vastly  enlarging  supply.  Capital  may  be  aided  to  keep  in 
advance  of  population,  by  the  reinforcement  of  capital  from 
abroad,  where,  profits  tending  fast  to  a  minimum — interest 
being,  where  no  risk  exists,  but  three  to  two  per  cent. — it 
is  ready  to  emigrate  to  regions  more  favorable  to  its 
employment.  Under  no  policy  can  this  immigration  of 
the  capital  necessary  to  accomplish  the  development,  be 
favored  so  properly  as  under  a  system  of  free  exchange, 
which  enables  both  to  furnish  that  which  they  can  produce 
cheapest,  and  directly  furnishes  the  exportable  article 
desired  abroad,  and  brings  in  return  the  capital,  there 
overflowing  the  channels  of  production,  to  effect  the  pro- 
duction of  the  article  here.  The  importation  of  such 
capital  is  needed  here  where  land  is  abundant  and  industry 
active,  and  both  are  calling  for  the  introduction  and  accu- 
mulation of  capital  to  develope  immense  resources.  If  we 
do  not  restrict  our  importations,  and  do  thereby  enlarge  our 
exportations,  Great  Britain  will  be  forced  to  send  her 
capital  here  in  order  to  assist  us  in  growing  food  for  her 
increasing  population,  now  outstripping  each  succeeding 
year  by  a  greater  advance,  the  food  producing  power  of 
her  soil. 


LAND.  38 

We  may  here  remark  that  it  is  the  wrong  policy  pro- 
tectionists would  adopt ;  they  seek  the  inefficient  means  to 
keep  out  the  influx  of  the  (by  them)  much  dreaded 
European  pauper  population  :  It  is  not  her  people  that 
Great  Britain  must  send  us  under  free  trade,  but  her 
capital.  It  is  under  the  restrictive  regime  that  she  must 
export  her  paupers  in  order  that  they  may  be  fed  here. 
Under  free  trade  they  will  be  fed  at  home  by  the  produce 
of  capital  sent  here  in  exchange  for  our  products. 

In  the  preceding  chapter  it  was  said  that  capital  and 
land,  which  last  agent  is  here  analogous  to  improvements 
in  production  and  increased  supplies,  are  in  this  country 
approximating  to  the  point  of  meeting  when  interest  shall 
be  at  a  minimum,  and  we  recommended  the  adoption  of 
facilities  that  have  a  tendency  to  postpone  the  junction 
with  its  consequent  reduction  of  profits.  Yet  in  this 
chapter  the  introduction  of  foreign  capital  is  favored, 
although  the  effect  of  an  increase  of  capital  is  to  lower 
profits.  Is  there  inconsistency  in  this  ?  No ;  because 
the  capital  thus  introduced  through  free  trade  operates  as 
a  facility,  as  would  a  discovery  in  agricultural  chemistry 
that  enabled  a  given  amount  of  land  to  produce  a  larger 
crop.  Without  increasing  population  and  narrowing  the 
space  between  food-production  and  consumption,  between 
population  and  land,  any  more  rapidly  than  it  would  be 
narrowed  without  such  introduction,  it  effects  more 
thorough  cultivation  of  occupied  lands  and  profitably 
occupies  new  or  waste  lands,  enabling  the  same  popula- 
tion that  would  have  peopled  the  country  had  the  capital 
not  been  introduced  to  gather  larger  profits  and  live  up  to 
an  improved  standard  of  comfort.  The  increase  of  capital 
being  in  a  greater  ratio  than  that  of  population  the  reduc- 

2* 


34  INDUSTRIAL   EXCHANGES. 

tion  of  capital's  profits  is  transferred  to  account  of  labor's 
wages,  increasing  them  as  much  as  profits  are  lowered. 
This  is  the  grand  desideratum  in  economic  science  and  in 
statesmanship.  Under  these  circumstances  there  is  a 
counteracting  force  of  physical  and  intellectual  improve- 
ment in  operation  to  prevent  the  point  being  attained  of, 
not  absorption  of  all  the  land  by  capital  and  labor  em- 
ployed in  making  it  productive — for  that  is  desirable  and 
must  for  a  long  time  to  come  be  the  policy  of  this  country 
to  encourage — but  of  an  excess  of  population  demanding 
subsistence  beyond  the  productive  power  of  the  land  to 
support  in  affluence  every  member  of  the  community  ;  or 
to  a  point  beyond  that  where  increased  labor  may  effect  a 
proportionate  increase  of  production,  the  proportion  that 
result  bears  to  effort  beginning  to  diminish.  The  increase 
of  capital  is  not  to  be  prevented,  but  encouraged  to  keep 
up  its  growth  at  a  rate  relatively  faster  than  the  growth  of 
population.  It  is  capital  this  country  wants  for  develop- 
ing its  resources.  It  is  a  population  it  wants  for  the  same 
purpose,  but  composed  of  a  people  accustomed  through 
generations  to  consumption  of  all  necessaries  and  comforts 
obtained  through  the  high  wages  that  their  relative  propor- 
tion to  capital  and  land  has  enabled  them  to  exact,  and 
which  wages  capital  has  been  enabled  to  pay  through  the 
operation  of  combined  natural  advantages  of  fertile  lands 
in  abundance  and  other  facilities  conjoined  to  free  trade 
and  its  markets. 

I  said  it  was  desirable  that  the  absorption  and  cultivation 
of  unoccupied  lands  should  be  effected.  They  should  be 
so,  embracing  all  the  varieties  of  cultivation,  including 
ample  reservations  for  the  beautiful  as  well  as  what  is 
commonly  known  as  the  useful.  This  does  not  involve  the 


LAND.  35 

theory  that  every  foot  of  land  must  be  brought  into  corn 
growing  for  an  overcrowded  population  to  procreate,  eat, 
and  die  upon.  The  absorption  of  all  the  land  by  capital 
and  labor,  in  the  sense  I  use  it,  does  not  preclude  the 
existence  of  forests  and  parks.  It  embraces  these,  to  be 
enjoyed  in  connexion  with  the  producing  fields  by  a  popu- 
lation not  so  dense  as  to  require  that  the  lawns  be  turned 
into  potatoe  hills,  in  order  to  supply  food  to  prevent  the 
superabundant  population  dying  from  starvation.  It  is  not 
too  much  to  assume  that  the  capabilities  of  man's  enjoy- 
ment embrace  a  wider  field  than  is  comprised  in  the  animal 
gratification  of  his  appetites.  This  earth  is  not  to  be 
devoted  solely  to  the  production  of  men  and  women,  and  of 
food  for  them  to  eat. 

Admit  that  the  time  is  far  distant  in  this  country,  farther 
adown  the  dim  vista  of  futurity  than  our  calculations  can 
penetrate,  when  the  excess  of  population  can  exhaust  the 
productive  power  of  the  land.  And  this  admission  appears 
consistent  with  reason,  even  though  we  extend  it  so  far  as 
to  say  that  time  can  never  come,  inasmuch  as  the  increase 
of  education,  and  the  high  standard  of  comfort  always 
effected  by  removal  of  the  pressure  of  poverty,  will  (the 
foundation  being  already  laid  in  our  institutions  and  abun- 
dant land)  prevent  that  effect,  and  postpone  it  indefinitely. 
Then  the  measures  of  free  exchange,  et  id  genus  omne,  will 
here  effect  and  keep  up  present  processes  of  the  more  equal 
distribution  of  property  and  the  levelling  of  classes,  the 
absence  of  which,  with  inequality  in  their  stead,  is  now, 
probably,  rather  than  any  excess  of  population,  the  cause 
of  the  distress  in  Great  Britain.  Whichever  theory  may 
be  recognised  as  the  true  necessity  there,  that  of  the  Mai- 
thusian  check  upon  population,  or  the  equal  distribution 


36  INDUSTRIAL   EXCHANGES. 

among  classes,  the  facility  of  free  exchange  equally  operates 
to  remedy  or  mitigate  existing  misery  there,  and  to  defer 
and  annihilate  approaching  misery  here. 

The  increase  of  population  is  at  present  in  the  United 
States  a  benefit,  not  an  evil.  The  true  economical  policy 
for  this  country  is  to  keep  up  the  process  of  distribution 
that  prevents  excessive  accumulations  in  few  hands  ;  and 
to  keep  the  proportion  of  agricultural  population  to  other 
from  falling  below  that  now  existing. 

The  inequality  just  referred  to  as  existing  in  Great 
Britain,  and  which  free  exchange  and  kindred  measures 
are  to  assist  our  institutions  in  keeping  far  distant  from 
this  country,  is  to  be  estimated  from  these  data.  The 
population  increases  in  England  sixteen  per  cent,  in  ten 
years ;  eight  millions  of  the  people  are  without  any  pro- 
perty, of  whom  three  millions  are  paupers  ;  and  four-fifths 
of  the  property,  real  and  personal,  are  owned  by  less  than 
two  hundred  thousand  persons  ! 

The  two  agencies  of  abundant  land  and  free  exchange 
combine  to  increase  capital,  the  immediate  agent  employ- 
ing labor  to  minister  to  consumption,  and  whose  increase, 
like  a  high  standard  of  comfort,  is  a  necessary .  means  of 
keeping  up  wages.  Free  exchange  adds  to  the  aggregate 
amount  of  capital,  and  increases  the  productiveness  of 
land  ;  what  does  it  do  for  labor  ? 


SIT,:: 
V. 

LABOR'S   LOSS   AND   GAIN. 

FROM  what  has  preceded  respecting  consumption,  capi- 
tal, and  land,  it  must  be  understood  that  the  amount  of  the 
fund  which  is  to  reward  labor,  depends  upon  two  condi- 
tions :  the  proportion  that  the  production  of  commodities 
consumed  by  laborers,  directly  or  indirectly  through  ex- 
change, bears  to  the  effort  of  labor  expended  in  the  pro- 
duction ;  and  upon  the  proportion  borne  by  the  production 
to  the  consuming  population  of  laborers. 

Protectionists  dwell  continually  upon  the  specific  amount 
of  labor  and  the  nominal  price  of  products,  without  notic- 
ing the  proportional  results  of  labor  and  the  abundance 
necessary  to  supply  the  wants  of  man. 

The  demand  for  labor  we  have  seen  is  increased,  and 
likewise  the  amount  of  its  remuneration,  by  freedom  of 
exchange,  because  in  adding  to  the  riches,  individual  and 
aggregate,  of  a  nation,  it  increases  the  disposable  capital ; 
and  this  seeking  avenues  for  investment,  new  methods  of 
employment  start  up,  and  improvements  are  effected  that 
would  not  otherwise  be  attempted.  All  branches  of  indus- 
try are  enlarged  and  active,  and  laborers  are  in  demand 
and  better  remunerated. 

Restriction,  limiting  the  quantity  of  commodities,  en- 


38  INDUSTRIAL   EXCHANGES. 

larges  the  prices.  But  these  greater  prices  for  the  articles 
produced  by  the  labor  of  the  country — though  at  a  superfi- 
cial view  they  may  seem  to  do  so— do  not  benefit  the  labor 
of  the  country.  The  community  has  to  pay  the  amount, 
and  without  possessing  increased  means  with  which  to  do 
so,  for  there  is  no  more  capital  in  the  country ;  on  the 
contrary,  there  is  less  than  there  would  have  been  had  no 
restriction  existed.  Some  other  branches  of  labor  in  the 
country  have  to  pay  the  amount  going  to  the  protected 
branches.  It  is  like  a  man  taking  a  sum  of  money  from 
one  pocket,  and  putting  into  another,  leaving  the  individual 
no  richer  ;  he  has  not  stooped  and  dug  out  of  the  ground  a 
valuable  ore,  and  placed  it  in  both  pockets  to  add  to  his 
wealth. 

Protective  laws,  therefore,  create  crises,  and,  instead  of 
increasing  the  amount  of  labor,  diminish,  and,  restricting 
its  freedom  of  directing  its  exertions,  displace  it. 

Is  it  said,  that,  with  less  production,  the  greater  the 
amount  of  labor  required  to  effect  the  result,  and  therefore 
increased  demand  for  it,  and  better  remuneration  to  the 
laboring  classes  ?  This  is  said  !  It  is  precisely  the 
theory  upon  which  protectionists  ground  their  arguments 
to  foster,  as  they  say,  home  industry.  But  how  dangerous 
a  reality  !  Increasing  labor  and  diminishing  result — 
carried  out  in  practice,  what  would  it  effect  ?  The  exter- 
mination of  the  printing  press,  that  tongue  of  Progress  ; 
of  the  use  of  steam  power  ;  of  the  electric  telegraph,  the 
magician  that  leads  the  red  levin,  once  hurled  destroyingly 
to  earth,  around  the  globe,  the  swift  trained  messenger  of 
man,  obedient  to  his  will,  to  breathe  in  antipodal  ears, 
while  yet  the  lips  that  syllabled  the  sounds  are  trembling 
with  the  emotion  that  prompts  their  utterance,  the  harmonious 


LABOR'S  LOSS  AND  GAIN.  39 

music  of  affection's  greetings.  Carried  to  the  extremity  of 
practice,  where  would  it  end  ?  In  the  result  of  total  non- 
production  !  It  is  the  practical  business  of  life  to  remove 
difficulties,  not  to  raise  up  windmills  for  Quixotic  combat 
to  waste  labor  upon.  This  theory  supposes  labor  to  be 
the  end  of  human  effort,  whereas  it  is  only  the  means. 
The  end  is  property,  riches,  an  improved  condition  of 
existence.  As  the  eye  is  kept  steadily  fixed  upon  the  end 
of  a  bettered  condition,  in  the  daily  toil  of  life,  it  is  neces- 
sary to  keep  it  there  in  the  theoretical  speculations,  or 
rather  the  scientific  researches  after  a  system  that  is 
wanted  for  the  sole  purpose  of  attaining  that  end. 

We  will  apply  the  economic  formula  to  the  effects  of 
free  trade  and  protection  upon  labor. 

Land,  capital,  and  labor  are  permanently  associated  for 
attaining  the  result,  and  for  dividing  between  themselves 
the  profits  of  their  joint  employment.  Finally,  we  must 
come  to  this  settling  of  the  account.  There  is  no  fourth 
estate  to  share  a  profit  or  suffer  a  loss. 

How  does  protection  affect  these  agents  of  production  ? 

Population  is  increasing,  causing  an  increased  consump- 
tion of  food.  An  increased  demand  for  agricultural  pro- 
ducts inevitably  causes  a  rise  of  rent,  supposing  no 
increased  facilities  for  production — whether  the  facilities 
be  improved  implements,  roads,  or  free  exchange.  To 
substantiate  the  above  position,  here  is  the  rationale :  New 
land,  either  of  an  inferior  quality,  or  at  a  greater  distance, 
must  be  brought  under  cultivation  to  furnish  the  required 
supply.  It  costs  more  to  produce  and  supply  a  given 
amount  of  food  from  this  new,  than  it  did  from  the  old, 
land.  Agricultural  products  will  take  the  price  that 
it  costs  to  produce  them  under  the  least  advantageous 


40  INDUSTRIAL    EXCHANGES. 

circumstances,  on  the  poorer  or  more  distant  land.  The 
old  land  has  the  gain  of  the  difference  in  cost  of  produc- 
tion, and  this  difference  goes  to  increase  its  value,  and  is 
the  rent  of  the  old  land. 

Therefore,  as  to  the  land,  protection,  in  increasing  the 
price  of  the  commodities  imported  and  home  produced, 
raises  rents  in  favor  of  those  who  have  appropriated  this 
agent  of  production;  rent  being  the  effect  of  a  monopoly. 
Adam  Smith  says,  "  high  or  low  rent  is  the  effect  of  high 
or  low  price." 

As  to  capital,  it  is  cosmopolitan  ;  and,  if  its  rate  of 
profits  is  forced  towards  a  minimum  by  the  operation  of 
the  laws  of  one  country,  it  has  a  tendency  to  seek  another 
where  the  rate  is  higher.  Its  rate  of  profit  is  measured  by 
its  relative  abundance,  and  its  sum  is  less  under  the 
regime  of  protection ;  facilities  increase  its  amount,  but  not 
the  per  centage  of  its  profits.  Our  manufacturing  capi- 
talists are  well  acquainted  with  this  principle,  and  hence 
they  seek  protection  for  the  particular  branch  of  industry 
in  which  they  have  invested  their  capital. 

When  population  and  capital  are,  on  the  whole,  increas- 
ing, as  they  are  known  to  be,  if  the  facilities  of  production 
are  at  a  stand,  or  diminishing,  rent,  we  have  seen,  is  bene- 
fited. The  cost  of  production  is  increased.  It  must  fall 
upon  either  capital  or  labor ;  which  will  succumb  ?,  We 
must  now  consider,  that  though  capital  is  generally 
increasing  with  population,  yet  whatever  tends  to  diminish 
facilities  for  .production  checks  the  growth  of  capital  in  a 
direct  ratio  with  the  increased  cost  of  production.  As 
between  capital  and  labor,  the  condition  of  affairs,  caused 
by  removal  of  a  facility,  then  is  capital  diminishing  in 
quantity,  and  labor  increasing  in  quantity,  with  growth  of 


LABOR'S  LOSS  AND  GAIN.  41 

popujation.  By  the  law  of  supply  and  demand,  capital^ 
rate  of  profits  must  increase,  and  labor's  diminish.  Labor 
seeks  capital,  asking  for  employment  ;  capital  is  not 
seeking  labor  to  offer  it  employment.  Labor  must  suc- 
cumb. Capital  sustains  its  profits  by  diminishing  wages  ; 
and  thus  the  increase  in  the  cost  of  production  is  cast  upon 
labor.  The  facility-destroying  protection  has  a  double 
action.  In  diminishing  capital,  and  thereby  lessening  the 
demand  for  labor,  it  reduces  the  amount  of  employment ; 
and,  in  raising  the  cost  of  production,  it  diminishes  the 
quantity  of  commodities,  and  raises  prices.  Labor  has  to 
consume  less  and  pay  more  for  what  it  does  consume, 
suffering  a  double  loss. 

Whatever  proposition  we  assume,  its  demonstration 
shows  us  that  labor  suffers  the  loss  in  the  result  of  pro- 
duction. The  increase  in  the  cost  of  labor  is  borne  by 
labor  itself.  It  can  only  be  labor,  since  the  rate  of 
profits  of  capital  and  rent  of  land  are  determined  by  the 
proportion  between  the  result  of  labor's  efforts,  production, 
and  the  amount  it  subtracts  therefrom  for  its  subsistence ; 
and  this  amount,  under  restricted  facilities,  must  diminish 
per  caput  in  an  inverse  ratio  with  the  increase  of  popula- 
tion, and  the  debasement  of  ignorance.  Rent  rises  with 
the  price  of  food,  and  profits  with  the  demand  of  labor  for 
employment,  corresponding  to  an  equivalent  reduction  of 
wages.  The  condition  of  the  densely-populated  countries 
of  Europe  attests  the  fact. 

The  gain  of  land  in  rent,  nor  the  gain  of  capital  in  an 
increased  rate  of  profits,  is  not  what  consumption  requires ; 
but  the  gain  of  labor  in  increased  wages. 

Labor,  the  sole  loser,  cannot  be  protected  directly. 
Foreign  workmen  cannot  be  excluded  from  the  country. 


42  INDUSTRIAL    EXCHANGES. 

Hands,  as  the  contractors  of  labor  technically  call  work- 
ing men,  will  be  manufactured  abroad,  and  will  be  im- 
ported on  living  bodies.  The  importation  of  laborers  must 
lower  the  wages  of  the  workmen,  and  the  manufacturers 
will  profit  by  the  partial  operation  of  tariffs.  The  product 
only  of  the  home  labor  is  then  protected,  and  not  the  pro- 
ducer, the  laborer.  Is  not  the  protective  system  charge- 
able with  materialism  ? 

Protection  is  indeed  unequal  in  its  effects,  and  will  con- 
tinue to  be  until  it  excludes  all  things  living  and  dead, 
organic  and  inorganic,  and  protects  alike  the  professions, 
the  trades,  &c.,  &c.  Until,  in  short,  it  does  what  provi- 
dence has  designed  never  shall  be  done — shuts  up  each 
people  within  a  triple  Chinese  wall,  to  suffer  a  living 
death. 

It  is  to  be  observed,  that  protective  tariffs  are  formed  to 
operate  against  the  working  man,  and  in  favor  of  ma- 
chinery. In  tariffs  generally,  the  protective  duty  is  rela- 
tively heaviest  upon  those  articles  manufactured  by  ma- 
chinery, whilst  on  those  made  by  manual  labor  it  is  com- 
paratively light. 

Even  though  labor's  hard  fortune  reduces  its  fate  to 
coming  off  third  best  in  the  industrial  contest,  a  discrimi- 
nation is  thus  brought  to  bear,  as  if  to  prove  that  beneath 
the  "  lowest  deep"  there  lies  a  "  lower  still,"  into  which 
all-grasping  Capital  would  thrust,  for  greater  security 
against  its  uprising  to  assert  its  rights,  this  much  oppressed 
third  element  of  labor. 

In  deranging  the  distribution  of  the  products  of  industry, 
protection  causes  injurious  effects,  where  benefits  would 
otherwise  occur.  The  two  divisions  of  labor,  manual  and 
machine,  are  prevented  producing  the  results  of  which 


LABOR'S  LOSS  AND  GAIN.  43 

they  are  capable.  An  ingenious  fable  of  Goethe  runs  in 
this  wise :  that  a  poor  workman,  obliged  incessantly  to 
carry  the  water  he  used  in  his  occupation  of  whitener 
from  a  brook  at  some  distance,  becoming  impatient  of  the 
labor,  one  day  suddenly  threw  away  the  wooden  yoke 
which  sustained  suspended  from  his  shoulders  the  buckets 
with  which  he  drew  the  water,  at  the  same  time  exclaim- 
ing, "  Miserable  that  I  am,  not  to  be  able  to  make  others 
work  for  me,  while  I  take  my  ease  !" 

The  yoke  in  falling  broke  into  two  pieces,  and  each, 
seizing  a  bucket,  ran  with  it  to  the  stream.  The  buckets 
filled  of  themselves,  and  thence  running  to  the  cottage  of 
the  workman,  emptied  their  contents  therein.  At  first  the 
man  was  very  happy  thus  to  be  spared  his  labor.  But  the 
two  buckets  continued  to  go  and  come  without  ceasing, 
and  ran  thus  to  the  stream  and  back  emptying  the  water 
into  his  abode  until  it  was  nearly  submerged.  Why  1 
Because  the  man  did  not  know  the  magical  word  which 
could  arrest  the  enchanted  buckets  in  their  career,  and 
would  enable  him  to  derive  from  their  labor  all  the  advan- 
tages of  its  production  without  being  subjected  'to  the  at- 
tendant disadvantages. 

The  two  buckets  have  been  likened  to  manual  labor  and 
machinery ;  the  powerful  word  which  can  conjure  the 
danger,  and  which  assures  to  the  world  the  benefits  of  the 
action  of  both,  is  free  exchange  between  all  countries, 
enabling  these  agents  to  operate  as  freely  as  they  do  in  the 
exchange  of  labor  and  products  between  the  several  indi- 
viduals of  a  community,  and  assisting  them  to  equalize  the 
distribution  of  the  results  of  labor. 

In  considering  the  effect  of  restriction  upon  labor  it  falls 
in  our  way  to  notice  a  cause  which  produces  like  effects. 


44  INDUSTRIAL    EXCHANGES. 

They  are  analogous,  because  both  waste  labor  unpro- 
ductively ;  favoring  only  partial  consumption  they  diminish 
the  quantity  of  those  commodities  entering  into  general 
consumption ;  both  effect  rarity,  scarcity,  dearness,  in 
opposition  to  common  abundance  and  cheapness.  A  false 
view  of  political  economy  has  supposed  that  the  extrava- 
gant luxury  of  the  rich  benefits  labor  so  far,  that  without 
such  expenditure  it  would  not  find  the  employment  it  re- 
ceives in  ministering  to  the  luxury.  This  should  be  taken 
with  qualifications.  The  investment  it  furnishes  for  capital 
and  the  consequent  employment  does  doubtless  benefit 
labor.  When  an  individual  invests  a  thousand  dollars  in  a 
brooch  or  bracelet,  not  for  personal  use  and  ornament,  that 
sum  is  not  locked  up  from  productive  employment,  and  is 
not  unproductive  capital,  so  long  as  it  represents  a  value, 
and  like  coin  is  employed  by  the  owner  in  purchasing 
labor  or  commodities  that  are  put  to  productive  use.  But 
when  it  is  held  as  a  permanent  investment,  or  for  wear,  the 
thousand  dollars  are  sunk  from  profitable  and  productive 
use.  The  benefit  derived  from  employing  capital  in  pro- 
ducing what  is  consumed  in  unproductive  uses  is  limited, 
and  another  kind  of  employment  might  extend  and  make  it 
general.  The  capital  so  employed  must  be  withdrawn 
from  occupation  in  those  channels  that  would  furnish  matter 
for  labor's  consumption.  This  portion  of  capital  is  devoted 
solely  to  gratifying  the  tastes  of  a  few  in  the  possession  of 
those  things  the  many  cannot  procure.  If  withdrawn  from 
the  purpose  to  which  it  is  applied  it  would  needs  be  em- 
ployed in  the  other,  and  with  the  ministration  to  the 
wants  of  labor  the  effectiveness  of  labor  would  be  enhanced. 
At  this  stage  of  the  argument  we  may  have  cast  in  our 
teeth  all  the  quackery  afloat  concerning  the  fine  arts,  the 


LABOR'S  LOSS  AND  GAIN.  45 

cultivation  of  a  refined  taste,  &c.  It  may  be  alleged 
that  the  theory  acknowledging  only  the  existence  of  the 
vulgar  useful  as  above  presented  tends  to  destroy  all  of  this 
that  should  be  cherished  as  consistent  with  and  inseparable 
from  the  progress  of  intelligence.  But  it  should  be  re- 
membered, that  there  is  a  wide  difference  between  the 
love  of  the  truly  beautiful,  between  an  appreciation  of  the 
moral  beauty  springing  from  the  Divine  aesthetics  and  that 
love  of  splendor  which  joys  in  the  possession  of  an  object 
of  show  because  it  marks  a  distinction  between  the 
possessor  and  those  who  cannot  possess  it.  This  is  a  sen- 
timent that  appropriates  to  itself  the  proceeds  of  labor, 
giving  through  its  limited  and  partial  consumption  a  direc- 
tion to  the  employment  of  capital  that  ensures  the  produc- 
tion of  such  commodities  as  the  labor  which  by  its  hard 
exertions  actually  produces  them  cannot  afford  to  enjoy. 
In  the  satin  and  velvet  manufactories  of  France  the  artisan, 
whose  sweat  and  skill  turn  out  to  view  the  gay  and  costly 
article,  cannot  wear  it,  nor  can  he  even  wear  shoes,  nor 
eat  of  meat. 

Supposing  a  community  of  one  hundred  persons  to  re- 
present a  country,  and  that  twenty  hold  the  capital  of  the 
community  in  their  possession.  Ten  of  them  hold  half  of 
it  in  land,  and  ten  in  money,  devoting  it  to  the  production 
of  articles  of  luxury  and  necessity  in  the  proportion  of  ten 
dollars  value  of  the  former  to  one  of  the  latter.  The  latter 
go  principally  to  the  consumption  of  the  eighty,  without 
capital,  who  labor  in  the  production ;  the  former  are 
in  part  sold  to  the  wealthy,  who  pay  in  their  rental,  and 
are  consumed  among  the  twenty  land  and  money  capital- 
ists. This  is  in  general  terms  much  the  present  condition 
of  society.  If  the  wealthy  were  to  diminish  their  consump- 


46  INDUSTRIAL    EXCHANGES. 

tion  of  luxuries,  capital  would  still  retain  its  ever-urging 
necessity  for  employment,  and. the  proportion  of  necessaries 
produced  would  be  increased.  Capital  would  transubstan- 
tiate itself  from  commodities  unproductively  to  those  pro- 
ductively consumable.  Although,  in  consequence  of  the 
twenty  consuming  less  of  luxuries,  the  manufacturing  tea 
would  not  supply  themselves  and  the  other  ten  with  so 
many  of  these,  capital  would  not  diminish,  as  it  would  pro- 
duce for  the  consumption  of  the  eighty  at  a  rate  that 
eventually,  gorging  the  capacity  of  all  for  consuming  arti- 
cles of  necessity  and  convenience,  would  furnish  the  entire 
hundred  with  luxuries.  The  eighty  would  pay  at  first 
with  their  labor  commanding  increasing  wages  ;  and  after- 
wards, as  with  the  progress  of  cheapness  they  accumulated 
capital,  would  pay  with  their  incomes  of  joint  wages  and 
profits.  The  incomes  of  the  landed  ten  not  expended  as  at 
first,  in  luxuries,  would  in  the  meantime  have  contributed 
to  swell  the  productive  investments,  and  hasten  the  progress 
of  the  rise  from  general  consumption  of  necessaries,  to  a 
general  consumption  of  luxuries. 

Extending  the  hypothesis  over  the  broad  field  of  the 
world's  production, — suppose  in  consequence  of  an  entire 
resignation  of  demand  on  the  part  of  the  rich,  all  the  capital 
now  invested  in  producing  velvets,  satins,  champagne,  and 
jewelry,  were  diverted  from  those  purposes  to  the  produc- 
tion of  breadstufFs,  and  of  such  clothing  material  as  would 
be  adapted  to  use  rather  than  ornament.  The  wealthy 
would  not  enjoy  their  satins,  champagne,  and  jewels,  but 
bread,  cottons,  woollens,  &c.,  would  cheapen  until  they  were 
brought  within  the  reach  of  all  who  needed  them.  And 
then  what  would  occur  ?  If  no  restrictive  laws  existed, 
the  capital  that  could  not  find  use  in  producing  these, 


LABOR'S  LOSS  AND  GAIN.  47 

would  flow  into  other  channels,  and  from  these  necessaries 
extend  to  comforts,  and  thence  to  luxuries,  as  stated  in  the 
supposed  case  of  the  hundred. 

It  is  unsound  political  economy,  because  it  is  not  econo- 
my either  collective  or  individual,  but  extravagant  waste- 
fulness for  capital  to  employ  itself  in  producing  for  the  un- 
productive consumption  of  wealth,  the  costly  and  the  rare, 
that  are  not  consumed  in  a  process  of  reproduction  for  the 
general  use.  And  it  continues  to  be  wasteful  as  long  as 
the  condition  of  labor  is  one  wanting  the  necessaries  of  life, 
in  consequence  of  there  being  not  enough  of  cheapness 
wrought  by  capital's  employment.  Yet  mankind  will 
always  covet  and  enjoy  luxuries,  as  under  proper  circum- 
stances of  general  participation  they  should  do.  Practi- 
cally it  only  remains  by  those  equalizing  measures  that 
entrench  not  upon  individual  right  to  acquire  and  enjoy  ; 
and  by  promoting  education,  freedom  of  exchange,  and  all 
the  cheapening  processes  whose  tendency  is  to  bring  first 
the  necessaries,  and  finally  the  luxuries,  to  be  shared  by 
greater  numbers  of  consumers,  to  promote  general  distribu- 
tion, and  thus  improve  the  direction  and  effect  of  produc- 
tion. An  attention  that  is  never  directed  from  the  end  ot 
general  consumption  will  prove  to  be  the  clue  wherewith 
successfully  to  thread  the  labyrinth  of  economic  policy. 


VI. 


WAGES   NOT   DIMINISHED   WITH   PRICES. 

IT  is  said,  that  if  free  exchange  should  achieve  the  end  of 
increased  supplies  for  subsistence,  wages  would  diminish 
correlatively,  because  wages  regulate  themselves  by  the 
cost  of  subsistence. 

This  is  an  error.  In  the  absence  of  all  restriction,  if 
commodities  are  produced  they  will  not  be  destroyed,  but 
consumed.  They  cannot  be  retained  in  the  possession  of 
capitalists ;  these  must  pass  them  along  to  the  poorer  con- 
sumers, who  will  have  more  to  consume.  I  once  heard  it 
stated  by  a  French  gentleman,  whose  ability  and  veracity 
are  alike  indisputable,  that  "  there  occurred  not  long  since 
in  France  an  enormous  rise  in  breadstuff's,  and  a  depression 
of  wages.  A  large  manufacturer  said  he  had  been  obliged 
to  lower  the  wages  of  his  workmen  because  the  manufac- 
tures could  not  find  a  market;  that  the  production  not 
meeting  with  consumption,  he  preferred  diminishing  wages 
to  stopping  the  works  entirely,  and  casting  the  operatives 
out  of  employment."  Not  meeting  with  consumption ; 
because  the  cost  of  living  was  so  much  enhanced,  the 
consumers  generally  could  not  afford  to  indulge  to  the 
same  extent  as  before  in  the  manufactured  articles.  Here 
the  application  of  the  key  of  consumption  solves  the  prob- 


WAGES  NOT  DIMINISHED  WITH  PRICES.  49 

lem  of  the  correlative  effects  of  subsistence  and  wages  upon 
each  other. 

Wages  are  determined  by  the  proportion  of  production, 
i.  e.  of  capital,  to  the  population  of  laborers.  They  are 
high,  if  the  capital  to  be  employed  in  contracting  for  labor 
is  great  in  proportion  to  the  population ;  for  capital  is  ever 
seeking  to  be  used,  and  in  its  use  employs  labor.  Under 
the  dominion  of  favoring  circumstances  enlarging  the  pro- 
portion of  production  to  the  effort  expended,  this  capital  is 
greater  in  due  proportion  to  the  increased  variety  and  quan- 
tity of  commodities  brought  within  the  general  consuming 
power  of  the  population ;  increases  with  the  enjoyments 
and  savings.  Therefore,  under  a  natural  condition  of  things, 
the  more  capital  the  greater  will  be  the  amount  of  wages. 
It  is  true  that  we  see  the  highest  wages  in  new  countries, 
and  lowest  in  those  older,  where  the  sum  of  capital  is  much 
larger  than  in  the  new.  This  is  because  the  new  regions 
possess  those  advantages  of  abundant  land  and  sparse 
population  that  are  natural  to  them,  and  which  cannot  be 
wrenched  from  their  labor  by  political  or  capital  power, 
and  produce  from  the  land  an  amount  of  the  necessaries  of 
life  larger  in  proportion  to  the  population.  On  the  other  hand, 
in  older  countries,  those  two  advantages  being  absent,  the 
two  powers  named  have  usually  profited  by  it,  and  worked 
their  unrestrained  will.  The  economic  principle  that  the 
greater  the  capital,  the  higher  the  wages,  would  always  be 
seen  to  hold  its  legitimate  dominion,  did  not  antagonistic 
causes  of  ignorance,  excessive  population,  and  practical 
inequalities,  both  industrial  and  social,  operate  to  coun- 
teract the  proper  action  of  the  law  of  economic  science, 
that  the  greater  the  capital  consumable  by  labor^at  large, 
the  greater  the  fund  from  which  to  remunerate  labor, 

3 


50  INDUSTRIAL   EXCHANGES. 

The  fund  exists,  and  it  is  that  from  which  wages  should 
be  paid,  and  from  which  they  would  be,  did  not  the  cause 
named  operate  to  divert  the  appropriation  of  much  of  the 
fund  from  the  channel  of  wages,  from  labor  consuming 
production. 

When  the  advocates  of  protection  shall  convince  me 
that  the  economic  principle  just  stated  is  not  scientific  but 
false,  and  that  freedom  of  exchange  is  not  a  cheapening 
facility  and  an  advantage  analogous  to  those  named,  I  will 
heartily  concur  with  them  in  their  efforts  to  put  down  free 
trade.  The  remuneration  of  producers  depends  not  upon 
how  much  money,  but  upon  how  much  of  consuma- 
ble articles  they  obtain  ;  because  labor,  in  produc- 
ing, consumes  the  accumulations  of  savings  from 
previous  production.  If  the  cost  of  these  has  been 
low,  the  expense  of  maintaining  labor  borne  by  its  employ- 
er, capital,  is  low.  (I  leave  aside  the  question  of  rent  as 
unnecessary,  and  not  affecting  the  argument.)  Also  if 
the  production  effected  is  large,  the  cost  to  capital  is  low. 
There  remains  besides  these  only  the  share  of  the  produc- 
tion going  to  labor,  the  wages,  to  complete  the  cost  of  labor 
to  capital.  The  two  first  being  low,  it  is  apparent  that 
the  latter,  wages,  may  be  high,  and  still  capital  obtain  a 
fair  profit.  Abundance  of  commodities,  of  production,  is, 
therefore,  not  inconsistent  with  high  wages.  In  other 
words,  wages  will  not  fall  because  the  cost  of  living  is 
cheapened.  The  reverse  may  be  the  case,  as  we  see  in 
England  wages  low  and  subsistence  high.  In  this  country 
we  see  wages  high  and  living  cheap.  The  cost  of  labor  is 
less,  as  is  proved  by  the  higher  profits  and  rate  of  interest. 

Under  an  enlarging  field  of  consumption  and  production 
spreading  over  the  ground  of  labor's  action  ;  under  the 


WAGES  NOT  DIMINISHED  WITH  PRICES.  51 

habit  of  greater  consumption  and  with  the  wider  demand 
for  labor,  wages  will  be  retained  at  a  height  that  will  meet 
a  raised  standard  of  their  necessities.  When  all  shall 
have  obtained  employment,  the  competition  between  labor- 
ers will  cease,  and  the  wages  will  cease  to  fall.  For  an 
indefinite  length  of  time  thereafter,  however,  employing 
capital,  aided  by  and  acting  through  the  development  of 
the  useful  arts,  and  the  improving  agricultural  and  manu- 
facturing processes — in  following  up  its  course  of  cheapen- 
ing production — may  continue  to  increase  the  quantities  of 
commodities,  and  bring  ever  more  of  these  within  the 
consuming  power  of  the  masses,  their  wages  and  their 
consumption  augmenting  together  in  a  double  amelioration. 

Thus  wages  do  not  fall  with  the  cost  of  subsistence,  as 
pretended  ;  nor  do  they  rise  with  it.  They  are  regulated 
by  the  call  of  capital,  which  is,  in  turn,  greater  or  less  in 
amount  with  the  increase  or  diminution  of  commodities  ; 
these  are  regulated  by  the  demands  of  consumption,  which 
increase  with  their  gratification  because  man's  wants,  by  a 
law  of  Providence,  ever  increase  with  his  possessions. 
Under  these  circumstances,  wages  rise.  Protection  granted 
to  all  the  various  branches  of  industry  around  the  circle 
of  production  would  circumscribe  it  within  constantly 
narrowing  limits,  would  stultify  it,  and  defeat  the  object  of 
the  protection.  Therefore,  when  on  the  other  hand,  under 
the  protective  regime,  the  demands  of  consumption  dimi- 
nish, through  diminished  power  of  gratification  caused  by 
lessened  quantities  of  commodities  produced,  there  is  a 
less  amount  of  capital  seeking  use,  the  field  of  labor  is 
circumscribed,  workmen  are  forced  to  seek  employment, 
and  wages  fall.  It  is  the  retrogressive  system. 

We  have  thus  again  described  the  industrial  circle,  and 


52  INDUSTRIAL   EXCHANGES. 

observed  that  the  ameliorations  effected  by  free  exchange 
are  *t\ot  transient,  but  are  durable.  They  are  not  retro- 
gressive, nor  stationary,  but  progressive,  under  the  effect 
of  the  law  above  named. 

When  protection  builds  up  an  interest  the  compensation 
of  labor  is  not  increased  ;  existing  capital  pockets  the  rise. 
In  reference  to  the  relative  positions  of  labor  and  capi- 
tal, and  the  effect  of  protection  on  wages,  Mr.  Secretary 
Walker,  in  his  comprehensive  language,  speaking  of  the 
results  of  investigations   made   by  an  expansive  genius 
combined  with  an  indefatigable  industry  seldom  brought  to 
bear  upon  the  science  of  industry,  says  : — "  The  wages  of 
labor  have  not  augmented  (as  claimed  then  in  1845  by 
the  friends  of  protection)  since  the  tariff  of  1842,  and  in 
some  cases  they  have  diminished.     When  the  number  of 
factories  is  not  great,  the  power  of  the  system  to  regulate 
the  wages  of  labor  is  inconsiderable ;  but  as  the  profit  of 
capital  invested  in  manufactures  is  augmented  by  the  pro- 
tective tariff,  there  is  a  corresponding  increase  of  power, 
until  the  control  of  such  capital  over  the  wages  of  labor 
becomes  irresistible.     As  this   power  is  exercised  from 
time  to  time,  we  find  it  resisted  by  combinations  among 
the  working  classes,  by  turning  out  for  higher  wages  or 
for  shorter  time,  by  trades-unions,  and  in  some  countries, 
unfortunately,  by  violence  and  bloodshed.     But  the  govern- 
ment, by  protective  duties,  arrays  itself  on  the  side  of  the 
manufacturing    system,    and,    by   thus    augmenting    its 
wealth  and  power,  soon  terminates  in  its  favor  the  struggle 
between    man  and   money — between   capital   and  labor. 
When  the  tariff  of  1842  was  enacted,  the  maximum  duty 
was  20  per  cent.     By  that  act  the  average  of  duties  on 
the   protected  articles  was  more  than  double.     But   the 


WAGES  NOT  DIMINISHED  WITH  PRICES.  53 

wages  of  labor  did  not  increase  in  a  corresponding  ratio, 
or  in  any  ratio  whatever.  On  the  contrary,  ^whilst  wages 
in  some  cases  have  diminished,  the  prices  of  many  articles 
used  by  the  working  classes  have  greatly  appreciated." 

Two  years  elapsed :  and  in  the  meantime  the  high 
tariff  of  1842  was  greatly  reduced,  and,  after  a  year's 
experience  of  the  effects  of  the  reduction,  in  December, 
1847,  the  same  able  statesman  in  his  report  thus  furnishes 
us  with  the  result : — "  Whilst  all  have  derived  great 
benefits  from  the  new  tariff,  it  is  labor  that  has  realized 
the  largest  reward.  It  was  contended  by  the  advocates  of 
protection,  that  it  enhanced  the  wages  of  labor,  and  that 
low  duties  would  reduce  wages  here  to  the  rate  allowed 
for  what  they  call  the  pauper  labor  of  Europe.  On  the 
contrary,  the  opponents  of  high  tariffs  insisted  that  labor, 
left  to  seek  freely  the  markets  of  the  world,  would  find  for 
its  products  the  best  prices,  and,  as  a  consequence,  the 
highest  reward  for  the  labor  by  which  they  were  produced. 
The  duties  have  been  reduced ;  and  yet  wages  have 
advanced,  and  are  higher  now  than  under  any  protective 
tariff.  There  are  many  more  working  men  concerned  in 
other  pursuits  than  in  manufactures,  and  with  much  less 
of  machinery  as  a  substitute  for  labor ;  and  by  depressing 
agriculture,  commerce,  and  navigation — by  restricting 
their  business  and  the  markets  for  their  products — the 
wages  of  those  engaged  in  such  pursuits  are  reduced ; 
many  workmen  also  lose  employment ;  and,  competing  for 
work  in  manufactures,  the  wages  of  all  are  diminished." 


VII. 


•         EDUCATION. 

THOUGH  it  be  at  the  risk  of  repetition,  we  must  devote 
to  the  subject  of  education  a  distinct  heading. 

From  the  principles  and  deductions  that  have  preceded, 
it  seems  that  where  Population  and  Capital  are  advancing 
more  rapidly  than  agricultural  skill  and  inventions,  there 
rents  are  rising  and  profits  and  wages  lowering.  In  the 
United  States  this  condition  of  things  is  modified  by  the  ex- 
istence  of  a  superabundance  of  fertile  land,  and  the  enter- 
prising energy  of  our  people  ;  these  coming  to  the  aid  of 
skill  and  inventions,  counterbalance  the  force  of  population 
and  capital,  and  rents  are  kept  down,  whilst  profits  and 
wages  are  sustained  at  par.  The  free  exchange  of  indus- 
try has  the  same  tendency  with  skill  and  inventions,  and, 
in  the  older  and  more  densely  populated  countries  of 
Europe,  would  come  to  their  aid  as  the  abundance  of  land 
and  enterprise  do  here.  Its  adoption  in  these  countries  may 
therefore  be  properly  and  with  scientific  correctness 
regarded  as  a  desideratum  beyond  all  cavil  and  exceeding 
our  power  of  valuation ;  while  in  this  favored  land  it  must 
be  hailed  as  the  great  good  to  assist  materially  in  raising 
us  to  a  still  more  lofty  position  in  the  gradation  of  blessings. 

The  effective  force  of  this  American  enterprise  lies  not 


EDUCATION.  55 

only  in  the  morale,  but  additional  weight  is  lent  to  it  by 
the  greater  proportion  of  population  applying  itself  to  pro- 
duction. The  total  population  of  Europe  is  estimated  at 
250  millions;  of  the  United  States,  23  millions.  The 
standing  army,  2,800,000  ;  employees  of  government, 
2,000,000  ;  and  idlers,  20,000,000,  of  Europe,  amount  to 
24,800,000  ;  and  in  the  United  States  the  army,  13,000  ; 
employees,  150,000  ;  and  idlers,  300,000  ;  amount  in  the 
aggregate  to  463,000.  One-tenth,  therefore,  of  the 
European  population  are  idle  non-producers,  against  a 
proportion  of  only  one  forty-fifth  in  the  United  States. 

When  we  look  upon  this  country  and  those  of  Europe 
in  the  true  light  that  penetrates  the  sophisms  and  phrases 
woven  around  the  subject  of  free  international  exchanges, 
by  its  opponents,  the  alarms  lest  our  industry  be  crushed 
in  a  free  contest  with  theirs,  are  exposed  in  all  their  weak- 
ness to  excite  our  wonder  that  they  are  so  fondly  cherished 
by  those  who  utter  them.  The  danger  seems  altogether 
to  lie  in  the  rejection  of  free  trade  and  kindred  measures, 
not  in  their  adoption.  This  will  be  the  inevitable  de- 
duction when  treating  of  free  trade  in  connexion  with 
education,  which  is  another  ally,  more  powerful  with  us 
than  in  Europe,  co-operating  with  our  broad  lands  and 
active  enterprise. 

The  improvements  effected  by  the  industrial  arts  and  all 
the  cheapening  processes,  furnishing  an  increased  con- 
sumption for  the  poorer  classes,  they  become  habituated  to 
a  degree  of  intellectual  and  physical  enjoyments  above  that 
they  before  enjoyed,  unless  where  the  population  is  dense 
and  fast  encroaching  upon  the  productive  capacity  of  the 
land  ;  and  those  classes,  instead  of  adding  to  their  enjoy- 
ments, simply  increase  their  families  to  be  fed  and  clothed 


56  INDUSTRIAL    EXCHANGES. 

by  the  old  standard.  In  order,  therefore,  that  a  diminution 
of  the  cost  of  living  may  be  permanently  beneficial  to  the 
people  at  large,  it  is  essential  that  the*ir  tastes  and  habits  be 
improved  by  the  process  of  education  developing  the 
intellectual  and  moral,  and  increasing  the  proportion  borne 
by  their  action  in  the  human  being  to  the  corporeal. 

Such  increase  promoted  by  education,  effects  in  its  pas- 
sage a  succession  of  triumphs  over  the  instincts  of  mankind, 
as  the  brutal  propensities  are  weakened,  and  the  intellectual 
strengthened.  The  instinct  of  reproduction  of  the  species 
will  with  others  be  brought  more  under  control,  and  where 
population  is  encroaching  upon  production  so  far  as  to 
reduce  wages  and  the  general  remuneration  of  labor,  the 
control  that  educated  mind  will  exercise  over  the  instinct 
referred  to,  like  that  it  exercises  over  intemperance,  acting 
to  check  the  growth  of  population,  will  arrest  the  downward 
tendency  of  labor's  condition. 

If  education  be  not  conferred,  then  the  improvement 
afforded  by  the  facility  would  be  temporary  or  trifling  ;  the 
proportion  of  population  to  production  increasing,  the  price 
of  food  would  be  higher,  that  is  to  say,  the  cost  of  its  pro- 
duction would  be  raised.  Wages  would  in  effect  be 
brought  back  to  the  old  rate ;  labor  would  sustain  the  rise 
in  the  cost  of  production,  where  it  would  be  thrown  by 
capital,  which  would  profit  in  proportion.  Causes  are 
then  to  be  seen  producing  their  legitimate  effects,  as  they 
may  be  observed  in  many  European  countries,  where  a 
dense  laboring  population,  poorly  fed  and  clad,  and  steeped 
in  ignorance,  are  seen  on  the  one  hand,  and  domineering 
capital  upon  the  other. 

We  see  that  Free  Exchange  and  Education  are 
measures  of  a  kindred  nature,  and  that  a  co-operation  is. 


EDUCATION.  57 

necessary  in  order  to  ensure  permanence  to  the  beneficial 
results.  Free  Exchange  is  an  effective  initiatory  step,  as 
it  gives  first  to  the  poorer  classes  the  opportunity  to  raise 
their  standard  of  comfort,  and  the  means  with  which  to 
act,  and  prepares  the  way  for  education  to  step  in  and 
keep  it  there. 

These  are  the  principles  and  their  tendencies  taken  in 
the  abstract.  Of  course  it  is  not  assumed  that  in  this 
country  we  could  not  practically  enjoy  the  blessing  of 
general  education  without  first  adopting  entire  free  trade. 
Experience  has  taught  us  that  we  can ;  because  kindred 
institutions  have  given  us  an  impetus  upon  the  right  path, 
yielding  great  results.  But  the  principles  are  not  the  less 
valuable.  Under  the  most  favorable  circumstances,  their 
adoption  heightens  beneficial  effects,  whilst,  on  the  other 
hand,  to  neglect  them  diminishes  the  force  of  those  effects. 
And  there  is  for  this  country  a  future  for  which  the 
present  is  but  a  preparation.  The  governmental  and 
economic  sciences  have  yet  to  reveal  many  principles  and 
much  practice.  Were  it  not  the  case  that  our  territory  is 
so  extensive  in  proportion  to  our  population  that  the 
poorest  land  brought  into  cultivation  and  determining  the 
rate  of  rent  is  very  productive,  causing  low  rents,  so  low 
as  to  be  merely  nominal,  and  high  wages  of  labor ;  while 
the  cost  of  labor  under  large  and  facile  production,  being 
low,  capital  gathers  good  profits  without  the  necessity  of 
bearing  hard  upon  labor  through  a  reduction  of  wages ; 
were  not  such  the  condition  of  things  in  this  country,  the 
favored  recipient  of  blessings,  a  few  years  of  high 
protective  and  restrictive  regime  would  tell  weightily 
even  upon  education.  Under  all  the  favorable  circum- 
stances above  enumerated  such  a  regime  could  not  fail  to 

3* 


58  INDUSTRIAL    EXCHANGES. 

have  its  effect,  that  would  doubtless  be  perceptible  were 
there  a  proper  statistical  society,  so  much  needed,  organ- 
ized in  this  country,  to  show  us,  among  other  things,  the 
necessary  educational  facts. 

If  any  country  can  sustain  itself  under  this  sapping 
regime  of  protection,  unquestionably  it  is  this.  But  it  is 
not  for  us,  tempting  Providence  to  play  lightly  with  our 
blessings.  Theories  may  be  put  in  practice  and  principles 
may  be  applied,  whose  effects  will  neutralize  much  that  is 
of  inestimable  value  in  our  institutions.  Measures  in 
strict  accordance  with  the  scientific  principles  of  a  true 
political  economy  are  necessary  to  the  retention  of  those 
blessings. 

Independent  of  the  danger  from  over  population,  the 
legitimate  effect  of  education  is  such  as  to  hold  the 
standard  of  requirements  at  a  height  that  will  insure  an 
adequate  reward  of  compensation  to  labor ;  one  that  will 
place  it  in  a  position  to  make  favorable  terms  with  capital 
for  a  rate  of  remuneration  above  what  would  be  claimed, 
and  therefore,  securing  higher  wages  than  would  be 
demanded  by  a  labor  steeped  in  squalid  poverty  and 
ignorance.  Then  if  the  Malthusian  theory  of  the  evils 
resulting  from  over  population  be  set  aside  as  inapplicable 
to  the  circumstances  present  and  prospective  of  the  United 
States,  if  there  will  be  no  population  pressing  upon  land 
and  its  capacity  of  production,  there  will  be  no  excess  of 
population  to  interfere,  and  prevent  labor  from  reaping  its 
full  benefit  of  the  improving  processes  of  education,  free 
trade,  and  kindred  agencies. 

.  When  we  consider  the  agencies  borne  by  labor  and 
land  in  production,  in  providing  for  the  increasing  wants 
of  increasing  numbers — placed  upon  the  earth  to  improve 


EDUCATION.  59 

it  and  themselves — we  are  struck  with  the  importance  of 
education  and  agriculture.  Whatever  enables  the  laborer 
to  produce  more  from  the  land,  and  whatever  promotes  his 
power  for  a  rational  enjoyment  of  the  product,  present 
themselves  as  desiderata,  that  claim  our  most  strenuous 
efforts.  Every  thinking  being  must  feel  sensible  of  the 
nobleness  of  a  pursuit  which  tends  in  any  degree,  however 
small,  to  advance  education,  the  mental  and  moral 
improvement  of  the  laborer;  or  to  promote  the  increase 
in  quantity  and  quality  of  agricultural  productions,  the 
basis  of  all  enjoyments. 

The  efficiency  imparted  to  the  humblest  departments  of 
industry  by  educated  intelligence  is  apparent  to  every 
observer.  The  emigrant  who  lands  upon  our  shores  and 
enters  the  family  of  a  citizen  in  the  capacity  of  maid  of 
all  work,  rich  in  brawn,  brogue,  and  blunders,  but  poor  in 
education  or  mental  development,  furnishes  a  common 
illustration  of  the  gain  labor  would  derive  from  education. 
The  careful,  educated  housewife,  who  has  occasion  a 
dozen  times  a  day  to  deplore  the  neglect  of  Biddy's  not 
having  employed  a  little,  but  a  little,  exercise  of  brain,  to 
the  saving  of  a  deal  of  exercise  of  heels,  exhibits  in  her 
own  methodizing,  systematic  course  the  advantages  of 
combining  thought,  educated  and  improved,  with  the 
manual  labors  of  the  day.  She  is  always  ready  to  affirm 
and  able  to  prove  that,  if  the  help's  mind  had  co-operated 
promptly  with  her  hands,  one  half  her  own  labor  would 
be  spared  which  she  could  then  devote  to  the  making  of 
the  children's  dresses,  that  she  now  must  send  out  to  the 
sempstress ;  in  short,  the  labor  could  be  done  by  two  that 
occupied  nearly  all  the  time  of  three,  effecting  a  desirable 
economy  of  labor  and  money. 


60  INDUSTRIAL   EXCHANGES. 

Statistics  show  us  that  but  forty  out  of  every  hundred 
persons  in  England  can  write  their  names ;  also,  that  one 
hundred  and  ninety-nine  of  every  two  hundred  in 
Massachusetts  can  write. 

We  here  see  the  comparative  results  of  free  education, 
as  it  prevails  in  New,  and  restricted  education,  as  it  has 
existed  in  Old  England. 


UNIVERSITY  OF 

<;  \UFORS1- 


VIII. 

PAUPER   LABOR— TRIBUTE— INDUSTRIAL 
PROFICIENCY. 

HYPOTHETICAL  examples,  involving  definite  applications 
of  the  principles  premised  in  the  preceding  chapters,  to  the 
circumstances  of  the  country,  will  best  serve  to  test  the 
truth  of  those  principles,  while  the  several  objections  urged 
here  and  abroad,  against  freedom  of  international  exchan- 
ges, are  being  considered. 

Advocates  of  protection  assert  that  the  United  States 
cannot  successfully  practise  unrestricted  international  ex- 
changes, because  it  is  younger  and  has  less  capital  and 
force  of  labor  wherewith  to  contend  against  the  industrial 
efforts  of  the  old  world,  and  express  alarm  lest  our  manu- 
factures be  prostrated  by  the  influx  of  cheaper  productions 
of  foreign  pauper  labor :  as  many  nations  produce  the 
same  articles,  free  exchange  would  strengthen  those  older 
and  more  proficient,  and  prevent  the  growth  of  our  indus- 
try. Hence,  it  is  claimed  that  protection  is  necessary  to 
keep  up  existing  manufactures,  and  to  effect  the  industrial 
education  of  this  tyro  nation,  in  order  to  raise  it  to  an 
equality  with  European  countries. 

As  paupers  never  labor,  the  catchword  form  of  expres- 
sion is  too  palpable  to  be  overlooked. 


62  INDUSTRIAL   EXCHANGES. 

Let  us  see  how  much  of  this  threatened  ruin  to  existing 
manufactures  would  be  realized,  and  in  what  manner  it 
would  operate  upon  our  interests. 

Suppose  foreign  nations  should  take  off  the  duty  on  our 
tobacco — in  England,  imposed  at  the  enormous  rate  of 
about  two  dollars  per  pound — by  a  reduction  of  twenty-five 
per  cent,  of  the  amount  per  annum,  and  we  should  do  the 
same  on  certain  of  their  productions.  I  always  use  the 
term  productions  in  the  generic  sense  of  the  result  of  labor, 
whether  manufacturing  or  agricultural.  The  consequen- 
ces of  such  a  reduction  would  be  a  large  increase  of  our 
tobacco  exports,  and  an  enlarged  increase  of  corresponding 
value  in  imports  of  their  productions. 

Where  would  the  increase  of  importation  fall  ? 

Not  upon  those  articles  in  which  we  can  now  nearly 
compete  with  them  on  equal  terms,  for  the  competition 
would  have  the  effect  of  perfecting  our  production  of  those 
articles  to  a  point  of  quality  and  cheapness  equal  with 
theirs. 

The  increase  would  attach  itself  to  those  articles  in 
which  we  are  greatly  inferior,  and  cultivate  or  manufac- 
ture under  disadvantages  that  render  their  production  a 
waste,  to  a  certain  extent,  of  our  labor,  when  they  can  be 
procured  much  cheaper  and  better  from  abroad. 

It  would  also  attach  itself  to  those  articles  which  we  do 
not  produce  at  all,  and  of  which  we  would  then  receive  en- 
larged supplies,  to  our  own  greatly  increased  enjoyment. 

The  labor,  which  with  us  had  been  dis advantageously 
employed  in  the  production  of  those  articles,  in  producing 
which  we  are  inferior,  would  be  called  to  employ  itself  in 
the  production  of  tobacco,  in  which  we  enjoy  superior 
advantages ;  and  this  labor  would,  in  consequence  of  those 


PAUPER  LABOR.  63 

superior  advantages,  yield  an  enlarged  result,  greater  in 
proportion  to  its  expenditure  of  force  and  capital  than  it 
had  previously  yielded.  Therefore,  the  gain  to  the  coun- 
try would  be  large  on  the  score  of  a  proper  em- 
ployment of  its  own  labor,  while  it  would  be,  on  the 
other  hand,  great  from  the  receipt  of  products  of  foreign 
labor,  which  before  had  been  shut  out  from  our  general 
consumption.  Every  country  gets  its  imports  at  less  cost 
in  proportion  to  the  efficiency  of  its  labor. 

Thus  it  is  that  a  double  gain  results  from  free  trade.  If 
such  advantages  are  derived  from  a  partial  application  of 
its  principles,  they  would  be  greater  in  due  proportion,  if 
mutually  adopted  between  countries,  in  relation  to  all 
commodities.  We  would  see  in  the  increased  quantities  at 
cheapened  prices  of  the  articles  required  for  consumption, 
and  in  the  increasing  product  of  our  own  labor,  furnishing 
means  with  which  to  purchase  those  articles,  a  double 
stream  pouring  its  wealth  from  two  exhaustless  and  ever 
augmenting  sources,  into  the  lap  of  labor,  to  enrich  the 
poor. 

Under  the  operation  of  free  trade,  we  observe  the  labor 
of  all  countries  working  to  produce  enlarged  quantities, 
each  of  their  natural  products,  and  casting  all  not  consumed 
at  home,  as  it  were,  into  the  general  reservoir  of  all  the 
world's  property  in  commodities.  Each  nation  is  then  seen 
to  draw  therefrom  that  which  it  wants — and  wants  because 
it  is  not  produced  as  cheap  at  home — and  drawing  freely, 
without  other  expense  than  transportation,  whilst  it  pays 
with  what  it  leaves  for  others'  uses.  Each  is  getting  cheap- 
ly, because  the  others  produce  abundantly,  with  all  of 
nature's  favoring  force  to  aid  them. 

Shall  a  people  refuse  to  enjoy  the  light  of  the  sun,  because 


64  INDUSTRIAL   EXCHANGES. 

it  shines  as  well  on  other  nations  ?  Shall  they  dam  up  the 
waters  of  the  stream  that  meanders  through  their  fields  and 
meadows,  distributing  its  fertilizing  force,  because  it  takes 
its  rise  in  the  territory  of  a  neighboring  people  ?  Or,  les- 
sening the  prohibition,  shall  they  admit  a  partial  flow  to 
fertilize  a  portion  only  of  their  soil,  because  an  individual, 
one  SIR  CHARTER  MONOPOLY,  has  dug  a  well,  and  fain 
would  distribute  its  waters  through  his  aqueducts  to  irri- 
gate the  lands  of  those  who  will  pay  him  toll  therefor,  but 
would  not  need  his  water,  did  the  entire  stream  pour  on  its 
natural  and  fertilizing  flow  ?  This  protection  is  but  modi- 
fied prohibition. 

It  is  laughable,  and  yet  one  needs  must  weep  instead, 
its  effects  are  so  deplorable,  to  see  nations  studiously  avoid 
receiving  a  benefit,  refusing  to  enjoy  the  free  reception  of 
foreign  manufactures,  that,  without  a  protective  tariff, 
might  be  enjoyed  at  a  rate  so  much  cheaper  than  is  paid 
for  them. 

The  weakest  nations  are  those  who  will  derive  the 
largest  amount  of  benefit  from  free  trade. 

The  question  has  been  incorrectly  stated  by  protection- 
ists. It  is  not  a  state  of  destructive  contention,  but  one  of 
profitable  amicable  exchange  that  nations  should  relatively 
occupy.  The  relations  countries  should  bear  towards 
each  other  are  peaceful,  not  warlike. 

If  A  has  most  of  commodities,  and  B  fewest,  and  requires 
more  of  A's  than  A  does  of  his,  it  is  clear  that,  if  freely 
exchanged,  B  is  proportionally  the  greater  gainer,  and  that 
he  must  be  the  least  able  to  sustain  the  burden  in  its 
immediate  and  ultimate  effects  of  any  imposition. 

Weaker,  it  is  said,  in  capital  and  labor,  we  permit 
ourselves  to  pay  tribute  to  England  whenever  withholding 


TRIBUTE.  65 

protection  from  our  manufactures.  To  show  how  fallacious 
is  this  charge  of  tribute,  and  how  impossible  that  it  can  exist 
as  an  effect  of  commerce,  we  will  suppose  that  from  some 
cause  we  come  under  an  obligation  to  pay  that  country 
fifty  millions  of  tribute,  in  annual  instalments  of  ten 
millions  of  specie  ;  and  assume,  what  is  near  the  fact,  that 
the  United  States  have  an  annual  trade  with  England  of 
60  millions  of  her  productions  exchanged  for  the  same 
value  of  English  products.  Next  year  the  first  instalment 
of  ten  millions  has  to  be  paid.  We  send  her  the  60 
millions  of  commodities  as  heretofore,  but  50  millions  is  in 
the  commodity  of  produce,  and  ten  millions  in  the  commo- 
dity of  specie.  We  receive  from  her  60  millions  in  the 
commodity  of  her  products.  What  is  the  effect  ?  Specie, 
becoming  scarcer,  rises  in  value  here,  and  England's 
products,  becoming  plentiful  here,  fall  in  value.  Our 
products,  getting  scarcer  in  England,  rise  there,  and 
specie,  becoming  plentiful,  falls  in  value  there.  The 
following  year  this  condition  of  the  international  exchanges 
augments.  What  results  ?  The  productions  of  England's 
industry  soon  become  so  low  in  value  here,  and  ours  so 
high  there,  that  she  is  obliged  to  send  back  the  specie,  in 
order  to  pay  for  the  amount  of  our  products  she  finds  it 
necessary  to  consume,  they  being  insufficient  for  the  pur- 
pose of  exchange,  as  our  market  is  glutted  with  them  for 
the  time. 

It  will  not  be  long  before  she  will  be  returning  to  us  the 
specie,  in  which  our  payment  of  tribute  was  made,  through 
the  transactions  of  commerce,  as  the  exports  and  imports, 
both  of  that  country  and  this,  specie  included,  must  become 
equalized.  This  would  occur  before  the  expiration  of  five 
years  of  instalments  ;  and  until  it  did  occur,  we  should  be 


66  INDUSTRIAL    EXCHANGES. 

receiving  a  larger  proportion  of  the  result  of  English  labor 
in  exchange  for  the  result  of  our  labor  than  we  sent,  be- 
cause her  products  would  be  at  a  less  money  value  than 
ours.  There  is  a  constant  tendency  in  international  ex- 
changes to  equalize,  and  no  difference  can  be  lasting. 
There  can  be  no  tribute  effected  by  free  trade. 

This  law  of  the  regulation  of  international  exchanges 
will  be  made  more  clear  in  the  chapter  upon  drain  of  capi- 
tal, where  it  will  be  seen  that  if  this  country  purchases  of 
another,  it  sells  something  as  an  equivalent,  and  we  are 
the  sellers  of  an  amount  of  our  produce,  for  which  we  are 
fortunate  to  find  a  purchaser  able  and  willing  to  pay,  on 
delivery,  in  articles  we  want,  and  at  a  cost  much  lower 
than  we  could  manufacture  them  at  home.  And  all  of  that 
difference  in  cost  of  her  producing  the  articles,  and  our 
doing  so,  is  our  clear  gain  ;  so  much  of  her  natural  ad- 
vantages of  labor  and  aptitude  is  appropriated  by  us  to  our 
profit. 

A  farmer  finds  it  more  to  his  interest  to  have  wealthy 
neighbors  than  poor.  If  he  can  reach  a  rich  city  with  the 
produce  of  his  farm,  he  finds  it  more  profitable  than  to  gain 
no  such  market. 

But  it  is  only  in  a  very  restricted  sense  of  the  term  that 
this  country  can  be  styled  weak.  The  jealousy  of  more 
advanced  nations  is  baseless,  and  a  policy  acting  upon  its 
dictates  is  suicidal. 

Mirabeau,  in  his  Monarchic  Prussienne,  has  carried  the 
principle  so  far  as  to  doubt  whether  the  trade  of  France 
was  injured  by  the  edict  of  Nantz,  which  drove  so  many 
skilful  artificers  out  of  the  country.  He  says :  "  It  is 
in  general  a  sure  principle  in  commerce,  the  richer  your 
buyers,  the  more  you  will  sell  them  ;  thus  the  causes  that 


INDUSTRIAL  PROFICIENCY.  67 

enrich  a  people  always  augment  the  industry  of  those  who 
have  business  with  them.  Without  doubt  it  was  a  fanatic 
folly  to  drive  200,000  individuals  from  their  country,  to 
enrich  another;  but  nature,  who  wishes  to  preserve  her 
work,  is  incessantly  repairing,  by  insensible  compensations, 
the  errors  of  men,  and  the  most  disastrous  faults  are  not 
without  remedy.  The  great  truth  offered  by  this  memora- 
ble example,  is,  that  it  is  foolish  to  destroy  the  industry  and 
commerce  of  our  neighbors,  since  it  can  instead  draw  to 
itself  their  treasures.  If  such  efforts  could  ever  produce 
their  natural  effect,  they  would  depeople  the  world,  and 
would  render  that  nation  very  unfortunate  which  had  had 
the  misfortune  to  engulf  all  the  industry,  all  the  com- 
merce of  the  globe,  and  be  ajwztys  selling  without  ever  buy- 
ing. Happily,  Providence  has  disposed  of  things  in  such 
a  manner  that  the  frenzy  of  sovereigns  will  not  be  able  en- 
tirely to  arrest  its  good  intentions  towards  our  species." 

If  political  convulsions,  revolution,  and  war,  are  expect- 
ed to  occur  in  Europe  to  derange  the  action  of  their  indus- 
try and  the  operations  of  trade,  we  hear  expressed  much 
regret  and  fear  of  injury  to  our  agricultural  and  commer- 
cial interests.  These  forebodings  grow  out  of  anticipated 
contraction  of  the  mutual  exchange  of  our  commodities  and 
theirs.  Yet,  with  characteristic  inconsistency,  the  same 
individuals  will  endeavor  to  entail  upon  this  country  a 
policy  of  non-intercourse,  partial  or  total,  by  tariffs  re- 
stricting our  importation  of  European  productions,  and  in- 
volving a  corresponding  diminution  of  the  exportation  of 
our  productions. 

These  inconsistencies  appear  because  protectionists  oc- 
cupy the  ground  of  restriction,  and  hence,  standing  upon 
a  wrong  principle,  if  it  were  carried  out  to  the  extreme 


68  INDUSTRIAL   EXCHANGES. 

results  in  practice,  the  consequences  would  be  disastrous 
and  destructive  of  all  production  and  enjoyment.  There- 
fore, it  is  necessary  to  check  the  operation  of  the  principle 
at  some  stage  of  its  action,  and  measures  are  advocated  or 
adopted,  which,  if  carried  to  their  extremes,  would  effect 
results  directly  the  reverse  of  the  original  principle.  The 
two  principles  avowed  are  necessarily  contradictory, 
and  the  contradiction  is  apparent  to  impartial  observers. 

The  objection  that  many  nations  produce  the  same  arti- 
cles, to  retain  any  force,  requires  an  exactly  permanent 
state  of  such  production.  It  also  requires  that  every  na- 
tion should  manufacture  all  things.  This  cannot  be.  In 
the  great  diversity  we  see  in  population  and  natural  fea- 
tures of  countries,  there  is  an  inexorable  prohibition  of 
any  such  contingency. 

As  to  effecting  the  industrial  education  of  a  tyro  nation 
by  protection,  it  may  be  said  that  competition  is  the  true 
lever  of  improvement,  and  will  keep  up  certain  branches 
of  production.  Guaranteeing  them  the  certainty  of  high 
prices,  will  leave  no  room  for  the  incentive  of  necessity  to 
operate.  The  unfilial  conduct  that  contemns  the  "  mother 
of  invention,"  causing  improvement  to  lag  behind,  will  not 
wake  the  genius  of  industry  in  a  people.  The  best  way  to 
do  this,  is  to  permit  direct  competition  with  other  people 
proficient  in  the  arts  you  would  instruct  them  in. 

I  heard  a  distinguished  member  of  the  French  Chamber 
of  Deputies,  whose  views  of  protection  were  sound  and 
clearly  expressed,  relate  the  following,  the  truth  of  which 
he  could  vouch  for.  An  iron  manufacturer  of  France, 
not  long  since,  was  asked  by  a  member  of  the  government, 
"  Do  you  think  that  a  protective  duty  of  15,  10,  and  5  per 
cent.,  successively  decreasing  during  fifteen  years,  would 


INDUSTRIAL    PROFICIENCY.  69 

enable  you  to  dispense  with  protection  at  the  end  of  that 
period  ?"  «  Without  doubt,"  he  replied.  The  official  then 
said,  "if  it  was  put  at  once  down  to  five  per  cent.,  how 
then  ?"  "I  would  prefer  to  live  fifteen  years,  to  being 
killed  off  at  once,"  replied  the  manufacturer.  The  official 
then  remarked,  "  There  are  perfected  improvements  well 
known  to  the  English,  you  could  examine  and  introduce 
them  into  your  establishments."  The  reply  was,  "  what 
need  have  I  to  go  to  England  ?  we  are  protected."  This 
reply,  so  potent  with  meaning,  was  delivered  with  the  most 
perfect  naivete,  with  a  matter-of-course  simplicity.  It  was 
in  effect  saying,  we  receive  from  our  fellow-citizens  a  per- 
mission for  making  articles  inferior  to  what  they  would  be 
if  protection  was  withdrawn. 

"  It  is  a  well  known  fact,"  says  Mr.  Mill,  "  that  the 
branches  of  production  in  which  are  fewest  improvements, 
are  those  with  which  the  revenue  officer  interferes,  and 
that  nothing,  in  general,  gives  a  greater  impulse  to  improve- 
ments in  the  production  of  a  commodity,  than  taking  off  a 
tax  which  narrowed  the  market  for  it." 

To  say,  give  us  protection  for  a  time,  until  we  have 
attained  proficiency,  is  deceptive,  for  while  we  are  advanc- 
ing, other  nations  are  improving  also. 


IX. 


A  HOME  MARKET  FOR  OUR  COTTON. 

IT  has  been  urged  in  this  country  as  a  reason  for 
protection,  that  we  require  a  home  market  for  our  cotton  ; 
because  if  we  manufactured  all  produced,  we  should  be 
independent  of  the  fluctuations  in  European  markets, 
where,  it  is  said,  a  rise  in  our  breadstuffs  cannot  be 
considered  a  fortunate  event,  because  the  scarcity  that 
produces  their  demand  abroad,  increasing  the  cost  of 
production  there,  causes  a  proportionate  reduction  of  the 
value  of  the  raw  material  upon  which  English  labor  is 
principally  expended.  That,  exporting  more  cotton  than 
corn,  we  lose  more  on  the  former  than  we  gain  on  the 
latter. 

The  elements  of  the  position  here  assumed  refute  of 
themselves  the  conclusion  drawn.  To  take  this  argument 
as  it  is  presented  to  us.  It  is  admitted — more,  it  is  made 
the  groundwork  of  the  whole  argument — that  scarcity 
abroad  injures  more  than  it  benefits  us.  It  is  in  effect 
stated  that  the  injury  is  the  exact  residue,  after  deducting 
from  the  loss  on  cptton  the  gain  on  corn. 

Then  if  the  gain  on  corn  was  greater  to  a  certain 
sufficient  extent,  we  should  suffer  no  loss.  This  being  the 
case,  our  policy  clearly  is  to  increase  that  gain.  Forcing 


A  HOME  MARKET  FOR  OUR  COTTON.  71 

labor  into  the  channel  of  manufactures  will  not  do  this, 
because  it  will  draw  off  from  agriculture  all  it  turns  upon 
manufactures,  and  thus  reduce  the  quantity  of  breadstuffs 
produced,  and  raise  their  price,  diminishing  the  amount 
exported  and  the  profits  thereon. 

Further,  the  effect  of  greater  scarcity  and  enhanced 
prices  of  breadstuffs  abroad  will  be  to  increase  still  more 
the  cost  of  production,  and  proportionally  reduce  the  value 
there  of  the  raw  material,  cotton. 

The  evil  complained  of  is  thus  aggravated  by  the 
proposed  remedy  of  the  protectionists. 

That  scarcity  abroad  injures,  and  plenty  benefits  us,  the 
advocate  of  protection  admits.  It  does  so ;  scarcity 
anywhere  injures  us;  and  plenty  in  like  manner  benefits 
us  and  all  others.  This  is  the  free  trader's  theory,  and 
because  those  effects  proceed  from  those  causes,  he  would 
promote  abundance.  But  the  protectionist,  looking  through 
his  distorted  medium,  arrives  at  erroneous  conclusions  even 
when  he  starts  with  a  correct  principle. 

What  is  the  tendency  of  his  theory  ?  He  would 
diminish  supplies,  and  promote  that  scarcity ;  and  wrap- 
ping himself  in  his  selfish  exclusiveness,  says,  "I  will  be 
sufficient  unto  myself,  raising  my  own  cotton  and  making 
my  own  clothes  from  it,  and  selling  the  foreigner  my 
surplus  corn  at  a  good  price,  will  pocket  the  money; 
independent,  I  will,  scorn  the  world.'7 

But  Providence  never  designed  this  state  of  things,  and 
soon  abases  his  pride  and  dissipates  his  selfish  dream. 
The  foreigner,  not  being  able  to  send  his  manufactures, 
cannot  take  the  corn,  for,  as  with  all  nations,  he  has  not  an 
unlimited  supply  of  gold  at  home  to  draw  upon,  and,  sooner 
or  later,  must  exchange  his  labor  for  what  he  wants. 


72  INDUSTRIAL    EXCHANGES. 

Hunger  and  suffering  are  with  the  foreigner  for  a  time, — 
the  protectionist  heeds  it  not,  but  Providence  not  permitting 
this  inequality  to  last,  the  operation  of  natural  laws  will 
regulate  the  balance. 

The  protectionist  has  his  corn  on  hand  unsold,  he  has 
in  addition  merely  his  cotton  and  cloths.  But  he  wants  a 
thousand  other  things,  and  he  must  live  on  deprived  of  all 
these,  poor  in  his  wealth,  unless  he  opens  his  door  to  admit 
the  foreigner's  products.  Rather  than  continue  to  exist 
like  the  miser,  on  dry  bread,  with  his  wealth  hoarded  up, 
he  yields  to  the  demands  of  his  nature  and  the  knock  of 
Providence,  and  opens  his  door,  when  the  respective  pro- 
ducts of  other  nations,  in  all  their  rich  variety,  come  pour- 
ing in  upon  him  in  exchange  for  his  cotton  and  corn. 

With  nations  as  with  individuals,  nature  has  ordered 
mutual  dependence  one  upon  the  other,  if  each  would  en- 
joy the  goods  a  teeming  world  will  yield  to  labor.  With 
nations  as  with  individuals,  a  shutting  up  within  the  nar- 
row limits  of  selfish  exclusiveness,  brings  a  deprivation  of 
many  of  those  goods  their  wants  demand,  and  a  final 
merging  into  a  state  of  barbarism. 

Labor  is  not  a  defined,  limited  quantity,  to  be  divided 
between  the  different  nations,  making  it  the  interest  of 
each  to  draw  to  itself  the  greatest  share,  and  its  consequent 
production.  The  field  of  labor,  of  production,  is  unlimited. 
The  elements  are  placed  at  the  disposition  of  man,  created 
in  the  image  of  God,  to  continue  the  work  of  creation,  to 
achieve  new  creations. 

But  the  protectionist,  semi-conscious  of  the  injury  to  be 
effected  by  the  full  operation  of  his  principles,  may  say 
that  we  will  prohibit  no  foreign  manufactured  articles  but 
those  of  cotton,  which  we  especially  desire  to  encourage, 


JL  HOME  MARKET  FOR  OUR  COTTON.  73 

and  will  admit  all  others ;  exchanging  for  these  our  corn 
and  cotton  manufactures,  thus  supplying  all  our  necessities. 
Deceptive  reasoning  !  that  will  not  succeed  in  practice,  nor 
enable  us  to  escape  the  penalty  of  practising  protection. 
We  will  trace  the  course  of  such  a  policy  to  its  effects. 

In  proportion  to  the  amount  of  labor  thus  concentrated 
on  cotton  manufactures,  will  be  the  decrease,  as  we  have 
seen,  in  the  production  of  breadstuffs.  They  will  rise  in 
price,  and  with  the  rise,  will  be  enhanced  the  cost  of  our 
own  cotton  manufactures.  We  must  then  sell  these  abroad 
at  a  high  price,  or  if  sold  low,  our  manufacturers  will  not 
be  able  to  pay  any  but  a  low  price  for  our  material.  The 
exports  of  breadstuffs  have  meantime  diminished  with  their 
lessened  production.  The  exportation  of  cotton  manufac- 
tures now  diminishes  with  their  rise  in  price— our  exporta- 
tions  become  altogether  limited,  and  our  importations  of 
varieties  in  foreign  manufactured  commodities  diminished 
in  proportion. 

What  have  the  foreigners  been  doing  meanwhile  ?  Cut 
off  from  manufacturing  our  raw  cotton,  and  enabled  to 
procure  but  limited  quantities  of  our  breadstuffs,  they  seek 
from  necessity,  improved  methods  of  agriculture,  and  di- 
recting into  that  channel  much  of  the  capital  before  em- 
ployed  in  cotton  manufacture,  produce  their  own  bread- 
stuffs  in  enlarged  quantities  ;  with  the  increase  of  supply, 
prices  diminish,  and  the  cost  of  subsistence  lowers  ;  the 
cost  of  manufacturing  is  with  them  diminished,  and  they 
can  afford  to  pay  an  advanced  price  for  the  raw  material. 
They  are  able  to  overbid  our  manufacturers  for  the  raw 
cotton,  and  the  planter,  willing  and  anxious  to  sell  where 
he  can  sell  dearest,  supplies  them. 

Where  are  we  then  ?  With  diminished  breadstuff  pro- 
4 


74  INDUSTRIAL   EXCHANGES. 

duction,  and  broken  down  cotton  manufactures,  we    are 
poor,  when  we  might  have  been  rich. 

It  is  thus  that  labor,  meandering  through  a  thousand 
channels,  over  the  entire  globe,  and  not  confined  to  a  dis- 
trict, finds  its  level ;  thus,  that  the  balance  of  production  is 
adjusted.  No  weight  of  selfish  exclusiveness  is  allowed 
by  Eternal  justice,  to  be  cast  by  one  of  the  nations  into 
her  scales,  to  weigh  down  the  rights  of  other  nations. 
Providence  has  ordained  that  the  effect  of  a  nation's  at- 
tempting to  deprive  another  of  the  enjoyment  of  its  produc- 
tions, determines  ultimately  and  disastrously  upon  the 
consumers  of  the  nation  making  the  attempt. 

Aside  from  the  foregoing  hypotheses,  which,  however 
much  they  may  be  said  to  define  an  extremity  that  would 
not  be  reached  in  practice,  are  not  the  less  true,  as  illus- 
trating the  effects  of  the  theory — the  short-sighted,  crip- 
pling policy  of  any  attempt  to  circumscribe  our  production 
of  raw  cotton,  by  squaring  it  with  our  manufacturing  of 
the  article,  is  more  than  objectionable,  it  is  ridiculous.  To 
be  sensible  of  this,  it  is  only  necessary  to  reflect  that  "  if 
France  and  Germany  (I  quote  from  Hunt's  Magazine) 
should  consume  cotton  goods  at  the  same  annual  average 
as  in  England  and  the  United  States,  viz.  25  yards  per 
head,  the  increased  consumption  will  be  equal  to  the  whole 
quantity  at  present  spun  in  Great  Britain."  We  see  here 
a  boundless  field  for  expanding  markets  for  the  produced 
raw  staple,  when  we  consider  that  the  approximation  to- 
wards this  rate  of  consumption  is  taking  place  not  only  in 
France  and  Germany,  but  throughout  the  civilized  world. 
To  meet  this  demand  for  the  raw  material,  we  may  with 
great  reason  aspire,  for  we  shall  have  no  important  compe- 
titor. But  to  hope  to  supply  it  manufactured,  would  be 


A  HOME  MARKET  FOR  OUR  COTTON.  75 

the  height  of  folly,  as  these  countries  must  all  do  largely 
of  manufacturing  from  the  raw  material. 

Such  is  the  extent  to  which  the  production  of  raw  cotton 
may  be  and  will  be  carried  in  the  United  States,  that  no 
extent  of  manufacturing  the  material  to  which  we  can  pro- 
fitably attain  will  consume  it  all.  That  this  manufactur- 
ing consumption  cannot  keep  pace  with  the  increase  of 
production,  is  evident  from  the  fact  that  whenever  duties 
have  been  most  highly  protective,  there  has  still  been  an 
increase  of  the  surplus  production  of  raw  material  over 
such  consumption.  I  refer  the  reader  to  the  official  statis- 
tics for  the  facts. 

This  policy  of  manufacturing  our  own  raw  material  of 
cotton  necessarily  involves,  to  a  certain  extent,  the  contin- 
gency of  finding  a  home  market  for  our  breadstufFs  also. 
We  have  not  got  this  market.  With  a  surplus  production 
of  breadstufFs,  and,  under  a  policy  favoring  international 
exchanges,  to  bring  capital  into  the  country,  with  the 
ability  to  defy  competition,*  it  must  be  seen  that  the 
desideratum  is  markets  ;  and  these  we  will  always  have  if 
we  do  not,  by  restrictive  laws,  refuse  to  receive  the  com- 
modities of  other  nations  in  exchange  for  our  own. 

*  It  is  stated  by  a  farmer  in  Western  New  York,  that  his  corn  crop 
of  1848  cost  him  but  9|  cents  per  bushel,  including  interest  on  the 
cost  of  the  land. 


X  . 


THE  FARMER'S   PROTECTION. 

THERE  is  no  necessity  for  forcing  the  practice  considered 
in  the  preceding  chapter,  of  excluding  foreign  cotton 
manufactures,  in  order  to  build  up  a  home  market  for  our 
raw  cotton,  and  diminish  its  exported  sum  as  compared 
with  that  of  breadstuffs.  Our  corn  and  wheat  growing 
region  is  much  more  extensive  than  the  cotton.  It  is 
intimately  and  widely  connected  with  the  physical  and 
moral  well-being  of  a  larger  number  of  the  people.  If 
other  branches  are  not  artificially  excited,  more  room  will 
be  left  for  the  expansion  of  breadstuff  production,  which, 
with  increased  exportation,  would  attain  a  degree  of 
importance  sufficient  in  some  seasons  to  balance  the  deficit 
between  it  and  cotton,  and  cure  the  evil  (supposing  it  to  be 
one)  complained  of.  In  1847  the  breadstuffs  exportation 
exceeded  the  cotton ;  yet  without  doubt  the  greatest 
expansion  of  foreign  markets  will  be  for  our  cotton  over 
other  exports.  Yielding,  as  we  do  already,  a  large  surplus 
of  breadstuffs  and  provisions  beyond  the  power  of  home 
consumption,  for  which  foreign  markets  are  yearly  ex- 
panding, to  check  their  enlarged  disposition  in  the  open 
markets  of  the  world,  is  one  of  those  measures  curtailing 


77 

our  agricultural  production  which  must  produce  the  effect 
of  casting  a  mass  of  rock  upon  the  young  sapling,  that 
distorts  the  fair  proportions  of  the  growing  tree,  and  stints 
its  otherwise  majestic  growth. 

Four-fifths,  eighteen  millions  of  the  population  of  this 
country,  are  directly  interested  in  agriculture.  The 
manufacturing  population  is  only  one-seventeenth  of  the 
whole  ;  about  fourteen  are  engaged  in  agriculture,  to  each 
one  employed  in  manufactures.  Two  centuries  and  a  half 
ago,  three-fourths  of  the  English  population  were  agricul- 
tural;  now  the  proportion  is  one-fourth.  Then  lived  the 
independent  English  yeoman,  and  that  comfortable  inde- 
pendence existed  which  now  forms  the  theme  of  romance 
and  of  ballad.  And  now,  alas  !  May  the  proportion  of 
four-fifths,  engaged  in  developing  the,  mother  of  the  arts, 
never  be  lessened  ! 

It  is  assumed  by  the  friends  of  protection — who  would 
build  up  factories  because  they  believe  the  degree  of 
intelligence  among  a  manufacturing  population  would  be 
higher  than  that  of  an  agricultural ! — that  with  the  increase 
of  manufactures,  nuclei  of  factories  and  manufacturing 
towns  would  be  formed  throughout  the  country,  whereat 
neighboring  farmers  would  find  markets  for  their  products, 
and  receive  commodities  in  exchange,  with  a  saving  to  both 
parties  of  transportation.  In  order  that  the  advantages 
assumed  as  contingent  upon  this  state  of  things,  supposing 
it  to  be  attained,  should  be  reaped,  it  would  be  necessary 
that  the  farms  should  remain  as  before,  of  small  size  and 
disposed  among  a  great  number  of  proprietors.  Such 
would  not  be  the  case.  With  the  growth  of  the  manu- 
facturing towns,  the  numerous  small  farms  about  them 
would  consolidate  into  a  few  large  ones.  The  small  tracts 


78  INDUSTRIAL   EXCHANGES. 

of  land  would  be  gradually  thrown  up  by  their  occupants, 
who  would  seek  in  the  promising  business  of  the  towns 
those  pursuits  that  would  at  first  offer  better  apparent 
opportunities  for  improving  their  fortunes.  As  they  were 
thrown  up,  they  would  be  gathered  into  the  hands  of  a 
fewer  number  of  proprietors.  No  moral  improvement 
would  be  experienced  by  those  who  changed  country  for 
town  ;  and  certainly  no  physical,  in  exchanging  free  play 
of  muscle,  with  sunlight  and  pure  air  playing  about  them, 
for  toiling  within  brick  walls,  imprisoned  in  cramped 
positions,  to  grow  old  in  their  early  years.  The  change 
from  small  to  large  proprietorships  in  turning  several  small 
farms  into  a  large  one,  would  diminish  the  effective 
production  in  proportion  to  labor,  which  in  agriculture  is 
greatest  when  the* proprietor  says  to  his  workmen, 
"  come  to  the  field,"  and  smallest  when  he  says  "  go  to  the 
fields."  Personal  superintendence  and  the  sense  of 
ownership  cannot  be  sacrificed  without  loss.  In  England, 
the  proportion  of  small  farms  is  much  less  than  it  was  two 
and  a  half  and  three  centuries  ago,  while  her  large  manu- 
facturing towns  have  absorbed  the  population.  The 
example  of  that  country  is  before  us  to  avoid,  not  to 
imitate  in  any  of  its  forms  of  protection  and  monopoly. 

If  protective  restriction  and  not  free  exchange  is  the 
facility,  if  lines  must  be  drawn  and  restrictive  barriers 
interposed,  why  not  place  them  between  states  and 
counties  as  well  as  between  nations? 

Only  such  manufacturing  as  is  so  unprofitable  as  to  re- 
quire protection  is  referred  to  here.  Europe  has  most 
capital,  we  have  more  land.  To  employ  our  labor  and 
capital  upon  the  land,  is  to  derive  therefrom  larger 
results  than  if  we  neglect  land,  and  employ  the  labor  upon 


THE  FARMER'S  PROTECTION.  79 

our  capital  in  manufacturing.  If  we  seek  to  raise  the 
result  of  the  labor  diverted  into  manufacturing  channels  to 
an  amount  equivalent  to  what  it  would  be  were  our  labor 
and  capital  employed  upon  the  land,  we  must  increase 
capital  ;  and  an  infinitely  great  increase  will  be  necessary 
to  furnish  a  force  sufficient  to  compete  with  the  heavy 
capital  of  Europe.  We  may  effect  this  increase  by  bor- 
rowing from  her. 

If  we  choose  the  former  course,  it  is  trade,  the  mutually 
independent  exchange  of  products  ;  if  the  latter,  it  is  bor- 
rowing, indebtedness.  One  is  the  frugality  that  expends 
only  its  income,  the  other  the  part  of  a  spendthrift  who 
pledges  his  estate  to  the  usurer. 

Whenever  the  loan  is  repaid,  it  is  in  the  accumulated 
profits  of  the  manufacturing  interests,  made  off  from  the 
consumers.  For  importations  made  under  free  trade,  there 
exist  means  of  payment  as  imported,  in  the  enlarged  pro 
ducts  of  consumers,  under  the  operation  of  labor  and  capital 
jointly  upon  land. 

Protectionists  would  thus  strive,  by  hothouse  growth, 
fictitiously  to  increase  our  capital ;  yet  they  say  that 
wealth  has  often  destroyed,  never  created  a  country.  But 
this  is  only  another  of  the  manifold  inconsistencies  to 
which  a  false  system  necessarily  gives  birth. 

On  occasions  of  scarcity  and  high  prices  in  Europe,  our 
agriculturists  are  benefited,  not  only  to  the  extent  of  the 
profits  made  on  the  amount  of  provisions  exported,  but,  in 
addition,  they  profit  by  the  enhanced  prices  of  that  con- 
sumed at  home,  which  are  augmented  in  due  proportion 
with  the  rise  on  the  article  shipped  abroad.  The  tendency 
of  capital  is  towards  accumulation  with  the  manufacturing 
interest.  While  the  agricultural  population  exceeds  the 


80  INDUSTRIAL    EXCHANGES. 

manufacturing  fourteen-fold,  the  value  of  agricultural  pro- 
ducts  is  only  three-fold  the  manufacturing.  The  principle 
of  free  exchange,  which  opens  a  wide  channel  for  the  ex- 
portations  of  our  agricultural,  therefore  tends  to  divert 
from  the  manufacturing  interest  a  portion  of  the  capital, 
which,  under  protective  tariffs,  rapidly  tends  to  excessive 
agglomeration  upon  that  interest.  And,  in  effecting  this 
diversion,  free  trade  measures  turn  a  portion  of  the  capital 
so  diverted  into  the  agricultural  channel,  preventing  that 
enormous  inequality  which  is  an  unavoidable  consequence 
of  the  operation  of  protective  measures. 

That,  after  this  diversion,  the  manufacturers  do  not  suf- 
fer, but  are  only  relieved  of  a  plethora,  is  evident,  when 
we  consider  that  this  branch  of  industry  exhibits  an 
abundantly  large  increase,  to  say  the  least,  under  the 
operation  of  the  present  revenue  tariff.  We  see  this  in- 
crease in  cotton  manufactures,  when  we  compare  the  home 
consumption  of  raw  cotton  in  1843,  which  was  325,000 
bales,  with  that  of  1848,  which  has  been  531,000  bales. 
In  the  meantime  the  exports  have  diminished  142,000 
bales. 

These  things  show  that  free  exchange  is  required,  that 
the  agricultural  interest,  distributed  upon  small  farms,  may 
receive  its  due  proportion  of  investment  of  increasing 
capital  and  return  of  profits  ;  and  show  also  that  our  cot- 
ton manufactures  do  not  need  the  bolstering  of  protection, 
in  order  to  retain  a  firm  footing  in  the  secondary  position, 
which  naturally  they  should  occupy  in  our  industrial  cata- 
logue, agriculture  being  entitled  to  the  first. 

Quoting  from  the  Democratic  Review  of  October,  1848, 
the  words  of  an  able  writer — "  the  great  free  trade  prin- 
ciple, as  applied  to  the  business  of  this  country,  has  come 


THE  FARMER'S  PROTECTION.  81 

to  be  well  understood  by  shrewd  and  practical  merchants, 
viz.  that  how  much  soever  arbitrary  tariff  laws  circum- 
scribe the  supply  of  goods,  and  confer  monopoly  upon  cer- 
tain classes  of  domestic  industry,  there  can  be  no  active  or 
lucrative  business  without  a  favorable  state  of  the  export 
trade,  such  as  will  raise  prices  of  those  agricultural  pro- 
ducts that  result  from  the  industry  of  three-fourths  (he 
might,  without  exaggeration,  have  said  four-fifths)  of  the 
consumers  of  goods,  and  therefore,  according  as  the  agri- 
cultural products  are  bright  or  otherwise,  is  the  faith  of 
both  importers  and  factory  agents  in  the  healthiness  of 
trade." 

These  are  the  results  of  a  tariff  much  freer  than  its  pre- 
decessor, and  so  far  well  for  the  time.  But  many  protec- 
tive features  exist,  which  are,  with  each  year  that  brings 
improvements  in  the  industrial  arts,  aggravating  in  cha- 
racter, and  the  time  is  rapidly  approaching  when  another 
reduction  will  be  required  to  meet  the  just  demands  of  that 
spirit  of  free  exchange  which  abhors  protection. 

Open  markets  and  no  restriction  make  the  true  farmer's 
protection. 

Four-fifths  of  our  population  being  agricultural,  and 
their  products  not  imported,  the  injustice  of  the  protection 
that  taxes  them  to  support  a  fraction  of  1-17  whose  capital 
is  invested  in  manufactures,  against  the  importing  com- 
petition in  articles  of  their  peculiar  production,  is  manifest. 
And  of  the  one-fifth,  the  remainder  of  mechanics  and 
professional  men,  like  the  farmers,  being  left  without 
protection. 

Why  do  not  the  medical  faculty,  profiting  by  the 
example  set  them,  pray  for  a  tax  upon  all  those  laud- 

4* 


82  INDUSTRIAL   EXCHANGES. 

ably  ambitious  students,  who,  after  a  few  years'  absence, 
import  scientific  knowledge  gathered  in  the  hospitals  of 
Paris  ?  Are  they  not  afraid  that  more  lives  will  be  saved 
by  this  imported  knowledge,  as  the  manufacturers  fear 
more  bodies  will  be  clothed  and  made  comfortable  by 
imported  necessaries  ? 

Our  agricultural  production  is  susceptible  of  indefinite 
improvement  and  enlargement.  Under  the  encourage- 
ment derived  from  the  markets  that  free  trade  would  open 
to  us,  our  hemp  and  wool  would  soon  add  their  powerful 
weight  to  that  of  cotton,  tobacco,  and  breadstuffs,  in  yield- 
ing  ample  returns  of  wealth  through  profitable  exchange. 

Farmers,  do  you  want  protection  ?  Then  seek  it  in 
removing  an  antagonist,  not  in  maintaining  its  existence. 
From  Buffalo  to  New  York  the  transportation  of  a  bushel 
of  wheat  costs  20  cents.  One-half  this  amount  is  paid  for 
the  canal  toll.  You  pay  this  tax  willingly.  Right !  it  is 
a  just  one.  It  is  paid  to  facilitate  transportation  and 
exchange.  The  law,  however,  is  the  agent  for  collecting 
from  you  another  tax,  not  less  in  amount,  but  an  unjust 
one.  It  is  paid  to  restrict  exchange.  So  dexterously 
is  this  extracted  from  your  pockets,  that  you  are  perhaps 
unconscious  of  your  paying  it.  Turn  to  Chapter  second, 
and  you  will  learn  how  it  is  done. 

Abolish  this  sleight-of-hand  system,  and  you  will  gain 
a  natural  and  healthy  protection  of  ten  cents  a  bushel. 
Probably  you  would  be  grateful  for  a  repeal  that  would 
relieve  you  of  the  other  ten  cents,  paid  for  canal  toll. 
Nevertheless  you  are  willing  to  continue  paying  the  just 
tax.  Are  you  willing  to  keep  up  the  payment  of  this 
unjust  one  ? 


THE  FARMER'S  PROTECTION.  83 

This  tax  has  a  double  effect ;  enhancing  the  cost  to  you 
of  the  necessary  articles  you  consume,  and  in  keeping 
closed  a  number  of  markets  against  you,  of  keeping  down 
the  prices  you  receive  for  your  produce. 

Is  it  suicide  you  would  seek  ?  The  thrust  of  the  steel 
alone  would  produce  death — why  envenom  its  point  ? 


XI. 


PRINCIPLES     GOVERN. 

IN  falling  back,  as  stated  in  Chapter  9,  to  occupy  the 
ground  of  special  encouragement  to  certain  branches  of 
industry,  protectionists  assume  that  absolute  principles  do 
not  govern,  but  that  mankind  regulate  their  transactions 
by  the  expediency  applicable  to  the  act  of  the  time.  The 
theory  of  free  trade  is  very  fine,  say  they,  but  in  practice 
it  proves  to  be  a  bubble  that  bursts.  It  is  beautiful,  but 
entirely  poetical. 

Principles  are  universal ;  if  protection  is  good  for  one 
nation,  it  is  good  for  all  the  world.  Restriction,  being 
injurious  to  one,  is  so  to  all,  and  in  proportion  to  the  extent 
to  which  it  is  carried. 

As  the  sole  object  of  the  protective  policy  is  to  turn  the 
balance  of  trade  (we  will  see  in  a  succeeding  chapter  how 
difficult  it  is  for  a  nation  to  gain  and  retain  this  balance 
of  trade)  in  favor  of  the  country  applying  it,  all  countries 
would  seek  to  turn  the  balance  in  their  favor,  which  would 
be  impossible.  The  protective  is  a  false  principle,  since 
it  cannot  be  applied  at  the  same  time  to  all  nations  for  the 
advantage  of  all. 

What  is  true  as  respects  individuals,  is  true  as  to  com- 
munities, in  all  matters  connected  with  production, 


PRINCIPLES  GOVERN.  85 

exchange,  and  consumption.  It  is  equally  to  their 
interest,  to  buy  where  they  can  buy  cheapest,  and  to  sell 
where  they  can  sell  dearest. 

Principles  are  universal.  Every  step  in  advance  made 
in  the  sciences  by  the  astronomer,  mathematician,  chemist ; 
every  glance  that  penetrates  the  arcana  of  nature,  confirms 
the  stability,  the  invariability,  the  unerring  certainty  of 
some  great,  yet  most  simple  law,  that  governs. 

Principles  are  absolute.  If  the  political  economy  that 
requires  protection,  denies  this,  then  that  theory  is  no 
science,  but  a  falsity.  That  it  does  deny  it,  has  been 
shown  by  protectionists  accepting  and  applying  the  prin- 
ciple *in  adopting  improvements  in  machinery,  that  enable 
one  man  to  do  the  work  of  many,  and  refusing  to  apply 
it  when  rejecting  the  removal  of  protective  duties,  whose 
effect  is  the  same. 

We  witnessed,  in  a  previous  chapter,  the  acceptance  of 
the  principle,  the  law  of  Divine  Wisdom,  which  declares 
that  all  gifts  of  Providence,  and  all  results  of  labor,  shall 
be  distributed  among  all  consumers,  when  we  saw  them 
benefited  by  adopting  the  sail.  We  there  observed,  also, 
its  rejection,  the  violation  of  the  principle,  the  law,  by  the 
sovereign  power,  and  all  who  upheld  it  in  the  act,  when 
the  sum  of  the  protection  was  added  to  the  original  tax. 

The  absolute  law  condemns  all  violation  of  its  principles. 

"  The  wealth  of  the  world  is  but  one,  the  exchanges 
which  negotiate  that  wealth  are  but  one,  the  merchants  of- 
the  world  are  in  one  partnership,  they  divide  but  one  pro- 
fit and  one  loss."  A  great  truth,  and  well  stated  by  the 
London  Times. 

The  nations  of  the  world  are  in  one  partnership,  a  great 
principle  forms  the  bond  of  union,  adherence  to  its  require- 


86  INDUSTRIAL   EXCHANGES. 

ments  is  profit,  their  violation  is  loss.  Unwise  that  policy 
which  trammels  their  trade,  restricts  the  free  exchange  of 
their  commodities,  loads  them  with  taxes,  checks  the  buy- 
ing and  selling  of  their  stock  in  trade,  curtails  their  busi- 
ness,  diminishes  their  profits,  and,  crippling  their  freedom 
of  action,  estranges  from  each  other  these  naturally  asso- 
ciated members  of  the  great  firm. 

"If  protection  was  the  high  road  to  national  prosperity 
its  advocates  would  have  us  believe,  how  is  it  that,  after 
generations  of  trial,  it  has  not  succeeded  in  gaining  an 
established  footing  in  the  hearts  of  this  people  nor  in  the 
councils  of  the  nation  ?  So  far  from  that,  it  has  been  con- 
stantly  combated,  and  throughout  the  civilized  world 
is  fast  growing  weaker  in  its  hold  upon  men's  minds. 
There  must  be  some  defect  in  its  principles,  or  it  would 
not  be  retrogradatory. 

The  practicability  of  free  trade,  besides  the  favorable 
though  partial  experience  here,  has  been  tested  and 
proven  beyond  a  doubt,  in  many  instances,  in  other 
countries,  some  of  which  will  be  noticed  hereafter. 

It  is  true  that  free  trade  is  poetical.  Is  there  a  great 
truth  that  is  not  ?  Is  the  false  poetical  ?  No !  but  the 
poetical  is  ever  true.  The  great  truths  of  the  Bible,  are 
they  not  and  have  they  not  ever  been  esteemed  poetical  ? 
Whatever  is  holy,  whatever  is  beautiful,  whatever  is 
pure,  is  fraught  with  poetry.  The  birth,  the  life,  the 
death,  the  teachings  of  the  Saviour  of  the  world,  are  they 
not  all  the  several  parts  of  a  great  poem  ? 

If  it  is  poetry,  and  poetry  it  is,  we  must  indeed  acknow- 
ledge the  great  worth  that  dwells  in  liberty  to  exchange, 
and  bow  to  the  force  of  its  truth. 

And  knowing  well  that  free  trade  is  of  the  true,  we  may 


PRINCIPLES  GOVERN.  87 

sing  with  a  firm  advocate  of  free  exchange,  America's 
immortal  bard — a  poet  whose  verse  seems  not  like  the 
flowerets  dancing  to  the  music  of  the  zephyrs,  nor  like  the 
soft  whisperings  of  sentiment  breathed  in  the  ear  of 
kindred  feeling ;  but  may  be  likened  to  the  mass  of  ever- 
living  granite,  that,  enthroned  for  ages  on  the  mountain 
top,  stands  forth  clearly  defined  against  the  heavens, 
majestic  in  severe  and  lofty  grandeur  : 

"  Truth  crushed  to  earth  will  rise  again, 
The  eternal  years  of  God  are  her*s ; 
But  Error,  wounded,  writhes  in  pain, 
And  dies  amid  her  worshippers." 


XII. 


SPECIE    DRAIN. 

PROTECTIONISTS  say  that  the  products  of  those  nations  pro- 
ducing the  cheapest  will  be  preferred  to  those  of  other 
nations  producing  the  same  articles,  who,  not  being  able 
to  exchange,  will  suffer  a  drain  of  specie,  an  exhaustion  of 
their  capital,  unless  they  restrict  importations  by  protective 
tariffs,  and  thus  prevent  the  balance  of  trade  turning 
against  them. 

Why  is  it  that  the  complaint  of  excessive  importations 
that  cannot  readily  find  a  market  is  often  made  ?  Why 
do  not  the  imported  products  immediately  find  consumers  ? 
Because  other  producers  have  not  made  a  sufficient  quan- 
tity of  other  products  to  exchange  for  them.  This  great 
fact  is  lost  sight  of  by  those  who  urge  the  complaint 
against  importations.  Were  importations  and  exportations 
limited  to  purchases  with  and  sales  for  money,  small  indeed 
would  be  the  aggregate  trade  of  the  world.  When  other 
producers  have  not  made  what  would  exchange  for  pro- 
ducts, restriction  has  in  many  cases  previously  operated 
to  diminish  the  power  of  production  through  its  lessening 
of  the  power  of  consumption. 

Those  who  urge  the  objection  of  a  specie  drain  lose  sight 
of  the  important  fact  that  importation  and  consumption  are 


SPECIE  DRAIN.  89 

individual  acts,  a  great  number  of  which  go  to  make  up 
the  national  operations  as  we  look  at  them  in  the  aggregate. 
The  increased  importations  that  keep  up  the  revenue 
under  a  reduced  tariff  are  made  in  consequence  of  the 
enhanced  cheapness  and  augmented  consumption  increas- 
ing products,  which,  as  the  goddess  Minerva  sprang  into 
life  from  the  head  of  Jove,  are  coming  ever  forth  into  full 
life  out  of  consumption.  Or,  rather  like  the  ephemera 
that  dies  in  the  act  of  reproduction,  leaving  a  brood  to  sup- 
ply its  place,  consumption  is  destroying  the  major  portion 
of  the  produce,  the  existing  capital  of  a  country,  in  the  act 
of  reproducing  new  results  from  the  industrial  effort. 
While  the  laborer  is  working  to-day  in  producing  the  value 
(or  a  little  more)  of  a  day's  food  and  clothing,  he  is  con- 
suming and  destroying  the  equivalent  food  and  clothing 
(wear  of  instruments,  &c.)  which  had  been  produced,  by 
his  labor,  yesterday.  The  existing  productions  disappear 
under  the  action  of  consuming  industry,  which  is  at  the  same 
time  achieving  new  products  in  greater  quantities  to  supply 
their  place.  The  more  there  is  consumed  and  consumable 
in  existence  from  which  to  accumulate,  the  more  can  be 
produced,  the  more  capital  there  is  to  exchange,  and  the 
imports  increase.  The  great  business  of  buying  and  sell-  ' 
ing  carried  on  throughout  the  world  is  by  the  exchange  of 
products  for  other  products  ;  not  by  selling  commodities  for 
money,  and  buying  again  with  money.  Importations  will 
not  be  made  faster  than  they  can  be  paid  for.  The  merchan- 
dise is  brought  into  the  country  by  importers  who  pay  for  it 
with  their  capital,  which  returns  to  them  on  the  sale  of  the 
importations  to  the  consuming  purchasers.  Each  of  these 
consumers  purchases  according  to  his  ability,  and  they 
pay  with  their  products,  and  those  products  are  the  reve- 


90  INDUSTRIAL   EXCHANGES. 

nues  of  their  several  capitals,  or  rather  their  reproduced 
capitals,  which  are  not  diminished,  nor  lost.  The  import- 
ers derive  a  profit  from  the  .business  on  their  capital 
invested,  or  they  would  not  continue  the  trade.  They 
consume  part  of  their  profits  in  living,  their  capitals  in- 
creasing, not  only  by  the  profits  made  off  from  the  con- 
sumers at  home,  but  also  by  those  made  off  the  foreigners, 
which,  in  returning,  effect  enlarged  importations.  These 
augmented  importations  are  what  the  protectionists  con- 
sider so  grievous  an  evil,  but  which  those  not  blinded  by 
a  fallacy  regard  as  an  addition  to  the  wealth  of  the  country, 
a  clear  gain  of  commerce  in  profits  made  upon  our  trade 
with  foreigners.  There  cannot  be  loss  to  the  community 
when  each  individual  engaged  is  profiting.  In  practice 
there  can  be  no  such  disastrous  results  as  the  protective 
theory  alleges  ;  and  the  country's  capital  is  in  no  danger 
of  being  exhausted. 

The  capital  of  the  country  in  this  manner  induces  the 
purchase  as  it  does  the  production  of  commodities.  As 
new  production  is  limited  by  the  capital  calling  upon  labor 
to  undertake  new  works,  the  new  purchases  likewise  wait 
for  capital  to  call  for  investment.  Although  without  en- 
larged consumption  production  and  capital  cannot  increase, 
purchases  are  not  directly  undertaken  in  consequence  of 
the  demand  for  consumption,  anv  more  than  the  demand 
for  labor  is  constituted  by  that  which  may  exist  for  those 
commodities  resulting  from  the  production.  There  might 
be  much  demand  for  an  article,  but  if  there  was  no  capital 
accumulated  it  would  not  be  produced  nor  purchased. 
The  direction  that  purchase,  as  well  as  production  takes, 
is  given  by  the  demand  for  consumable  commodities  which 
turns  into  its  channels  the  existing  capital's  demand  for 


SPECIE  DRAIN.  91 

labor,  likewise  already  in  existence.  Wealth,  capital,  in- 
stead of  consisting  of  specie,  being  made  up  of  the  consu- 
mable commodities  which  are  the  produce  of  industry,  the 
-money  that  facilitates  distribution  of  these  products  is 
valuable  only  for  its  purchasing  power,  and  only  so  far  as 
it  represents  the  products  ;  and  then  this  representative  is, 
in  effect,  the  commodity  itself.  This  specie  has  been  re- 
ceived from  some  source,  in  exchange  for  a  nation's  pro- 
ducts, and  the  country  is  fortunate  in  being  able  to  ex- 
change again  this  mineral,  which  has  in  itself  no  virtue, 
and  cannot  either  feed  or  clothe  its  people,  for  those  pro- 
ducts which  they  need  for  their  enjoyment.  Then  we  are, 
in  fact,  still  exchanging  products  for  products.  This,  as  I 
heard  M.  Horace  Say  express  it,  from  the  tribune  of  the 
Congrds  des  Economistes,  is  the  "  corner  stone  of  the  edi- 
fice of  political  economy." 

Our  trade  is  with  many  nations  ;  if  the  balance  with 
one  is  against  us,  it  is  in  our  favor  with  another,  and  when 
we  come  to  balance  accounts  with  all,  aside  from  the 
profits  made  on  our  products,  we  will  have  exported  as 
much  as  we  have  received  ;  no  one  of  them  will  consent 
to  supply  us  with  her  products  gratuitously  And  if  she 
did,  would  it  not  be  a  gain  ? 

"  Gold  and  silver,"  says  the  profound  Ricardo,  "having 
been  chosen  for  the  medium  of  circulation,  they  are,  by 
the  competition  of  commerce,  distributed  in  such  proportions 
among  the  different  countries  of  the  world,  as  to  accom- 
modate themselves  to  the  natural  traffic  which  would  take 
place  if  no  such  metals  existed,  and  the  trade  between 
countries  were  purely  a  trade  of  barter." 

Notwithstanding  what  has  just  been  stated,  the  balance 
of  trade  objection  will  perhaps  be  pertinaciously  adhered 


92  INDUSTRIAL    EXCHANGES. 

to.  It  is  proper,  therefore,  to  present  the  true  theory 
more  in  detail.  Supposing  an  excess  of  importations — we 
have  already  seen  that  the  existence  of  a  surplus  is 
evidence  of  insufficient  capital-employing  production  at 
home,  whose  products  would  have  furnished  exportable 
commodities,  that,  in  being  exported,  would  have  prevented 
the  excess  of  importations ;  or  it  is  evidence  of  excessive 
exportations,  in  other  words,  previous  insufficient  importa- 
tions of  commodities  exclusive  of  specie,  this  last  com- 
modity preponderating.  As  we  have  before  seen,  coming 
in  as  a  commodity  it  is  proper  it  should  go  out  as  the 
same,  and  no  loss  is  thereby  sustained.  Upon  occasion  of 
the  excess  of  importations,  the  exportation  of  specie  will 
continue  until  the  surplus  is  withdrawn,  when  the  export- 
able commodities  will  become  cheaper,  money  having 
risen  on  the  other  side  of  the  scale  causing  prices  to  fall, 
and  the  demand  for  them  will  in  consequence  rise  abroad. 
Then  if  the  country  could  not  export  when  prices  were 
high,  it  will  be  able  to  do  so  when  they  are  low,  and  the 
balance  will  be  restored.  What  Mr.  Mill  happily  calls 
the  equation  of  international  demand  will  be  established. 

There  will  be  an  auxiliary  power  at  work  aiding  in 
establishing  the  equilibrium,  which  will  be  of  itself  suffi- 
cient to  effect  it  in  all  save  rare  instances  like  the  preced- 
ing supposition.  In  the  ordinary  disturbances  of  trade, 
such  as  might  occur  under  the  pure  unadulterated  regime 
of  an  unrestricted  traffic — temporary  and  to  be  readily 
equalized  by  the  laws  of  trade — the  premium  of  exchange 
would  adjust  the  balance.  Imports  exceeding  exports  in 
value,  exchange  is  against  the  country  ;  but,  selling  for  a 
premium,  it  is  so  far  a  gain  to  the  exporter,  an  addition  to 
the  sum  he  receives  for  his  merchandise,  and  encourages 


SPECIE  DRAIN.  93 

his  exportations.  Being  transferred  to  him  from  the 
pockets  of  the  importer,  who  must  feel  this  tax  upon  his 
importations,  it  operates  as  a  check  upon  them.  Gradu- 
ally the  exportations  proportionally  increase,  exchange 
lowers,  and  thus  temporary  balances  are  adjusted  without 
specie  being  transmitted  at  all. 

Soon,  perhaps,  this  side  of  the  scale  rises  in  its  turn, 
and  exchange  settles  past  the  central  point  of  par,  until 
getting  in  favor  of  the  country,  it  can  afford  to  export  at 
reduced  prices,  because  what  is  lost  in  depreciation  of 
commodities'  prices,  it  gains  in  the  rise  of  exchange,  now 
in  its  favor,  again  to  return,  like  the  needle  that  is  tem- 
porarily turned  from  the  polar  point,  and  settle  about  the 
magnetic  centre  of  par. 

Ports  being  open,  and  exchanges  of  commodities  active, 
there  is  no  obstruction,  as  under  the  restrictive  regime,  to 
the  operation  of  these  and  all  other  processes  of  equaliza- 
tion. Whichever  way  we  turn,  we  find  channels  open, 
through  which  the  waters  of  trade  are  seen  rushing  to 
distribute  themselves  equally  in  all  the  regions  of  produc- 
tion and  consumption,  leaving  their  fertilizing  deposits 
of  profits  with  all. 

This  balance  of  trade  alarm  is  in  truth  mere  fallacy. 
It  adjusts  itself  between  nations.  Each  can  take  no  more 
than  it  can  pay  for,  and  each  will  send  no  more  than  it 
receives  payment  for.  Then  there  is  no  such  thing  as 
balance  between  the  amount  of  a  nation's  exports  and  its 
imports,  save  the  literal  balance  that  makes  both  equal. 

Does  the  balance  lie  then  between  the  amount  of  our 
productions  and  the  amount  of  our  consumption  ?  No ; 
the  amount  of  these  productions,  whatever  they  may  be, 
are  consumed  immediately  at  home,  or  mediately  through 


94  INDUSTRIAL   EXCHANGES. 

what  we  receive  in  exchange  from  other  nations ;  and 
this  is  likewise  made  the  literal  equal  balance.  Then 
there  is  no  such  thing  as  a  balance  of  trade — it  is  a  chimera. 

But  there  is  one  thing  that  is  tangible,  and  will  satisfy 
our  inquisitive  search,  if  we  do  not  neglect  it.  In  seeking 
for  the  non  est  "  balance  of^trade,"  we  were  brought  to  a 
stand  at  the  point  of  consumption.  We  find  every  problem 
terminate  upon  that  point.  The  consumption  was  found 
to  be  just  equal  to  the  production.  To  enrich  a  country, 
then,  is  to  facilitate  the  greatest  amount  of  production  in 
proportion  to  its  labor.  We  have  already  seen  how  well 
free  trade  is  entitled  to  be  considered  a  facility. 

If  protectionists  must  need  still  insist  upon  having  a 
"  balance  "  of  specie,  they  will  learn  by  reference  to  the 
statistical  facts,  that  for  the  last  year  of  the  high  tariff  of 
1842,  the  balance  was  $8,203,281  against  us  ;  and  for  the 
year  1847,  the  first  year  of  the  reduced  tariff,  it  was  $12,- 
103,984  in  our  favor.  But  transient  must  be  the  balance, 
as  it  should  be.  In  the  year  1848  a  large  exportation  of 
specie  reduced  the  excess. 

With  further  reference  to  statistics  it  will  be  ascertained 
whether  the  drainage  of  specie  from  this  country  in  past 
years,  has  actually  been  greatest  under  high  or  low 
tariffs.  I  quote  from  the  report  of  the  Secretary  of  the 
Treasury  for  1847,  the  evidence  being  substantiated  by 
tables  compiled  from  the  records  of  the  department,  and 
appended  to  the  report. 

"  The  four  protective  tariffs  were  enacted  in  1816, 1824, 
1828,  and  1842.  The  compromise  act  intervened  from 
March,  1833,  until  after  the  30th  of  August,  1842;  and 
the  revenue  tariff  of  1846  went  into  operation  last  year. 
Let  us  now  look  at  the  effect  of  high  and  low  tariffs  upon 


SPECIE  DRAIN.  95 

the  gain  of  specie  during  these  periods,  from  1821,  being 
the  earliest  date  to  which  the  records  of  the  Treasury  go 
back  on  this  subject.  From  the  beginning  of  1821  until 
the  commencement  of  1833,  and  from  30th  September, 
1842,  until  1st  July,  1846,  our  excess  of  the  imports  of 
specie  over  the  exports  was  $12,660,312,  being  an  average 
annual  gain  of  $791,216  in  specie  during  these  sixteen 
years  of  high  tariffs  ;  whilst  the  excess  of  specie  during 
the  eleven  years  of  the  compromise  act  of  1833,  and  low 
tariff  of  1846,  was  $68,507,630  ;  and  the  average  annual 
gain  of  specie  was  $6,227,967.  Omitting  the  tariffs  of 
1842  and  1846,  and  comparing  the  ten  years  of  com  para- 
tively  low  duties  from  1833  to  1842  with  the  twelve  years 
under  protective  tariffs  from  1821  to  1832,  we  find  under 
the  latter  an  actual  loss  of  specie  to  the  country  by  the 
excess  of  the  exports  of  specie  over  the  imports,  of  $3,851,- 
652,  as  the  result  of  protection,  and  a  gain  during  the 
succeeding  ten  years  of  comparatively  low  duties  of  $46,- 
294,090,  or  at  the  rate  per  annum  of  $4,629,409,  and  in 
the  single  year  under  the  new  tariff  a  gain  of  $22,213,550  ; 
thus  exhibiting  a  uniform  gain  of  specie  in  the  years  of 
low,  as  compared  with  high  duties.  The  protective  theory, 
founded  upon  this  assumed  balance  of  trade  and  gain  of 
specie  under  high  tariffs,  is  disproved  by  the  results  ;  and 
it  is  shown,  by  the  experience  here  of  more  than  a  fourth 
of  a  century,  even  as  to  specie,  that  it  accumulates  most 
rapidly  by  the  gains  of  trade  under  a  liberal  commercial 
policy." 

There  is  nothing  more  ridiculous  than  the  oft  repeated 
objection  to  free  trade  that  low  tariffs  encourage  importa- 
tions to  excess  until  we  become  largely  indebted  to  foreign 
countries,  and  have  to  pay  in  specie,  followed  by  over 


96  INDUSTRIAL   EXCHANGES. 

trading,  derangement  of  currency,  and  all  the  stereotyped 
bugbears  that  furnish  excuses  for  the  loud  calls  made  for 
restriction,  wherewith  to  confine  trade  within  the  limits  of 
good  behavior.  To  "  restrict  importations  by  special 
acts  of  Congress  ! !"  As  if  trade  was  a  madman,  that 
must  be  put  into  a  strait  jacket  to  force  submission  to  cer- 
tain conventional  rules  and  regulations.  Supposing  that 
for  a  long  term  of  years  no  such  thing  as  a  tariff  existed, 
no  person  can  possibly  believe  that  trade  would  not  regu- 
late itself  by  the  law  of  supply  and  demand ;  and  that, 
because  a  tax  did  not  exist  to  enhance  the  values  of  certain 
commodities,  therefore,  heedless  of  the  limit  of  demand, 
individuals  would  be  found  so  insane  as  periodically  to 
ruin  themselves,  by  furnishing  to  the  community  uncalled 
for  supplies.  On  the  contrary,  it  must  be  evident  that  the 
values  and  prices  being  less,  more  would  be  consumed  ; 
and  that,  as  when  prices  were  higher,  the  supply  would 
be  furnished  to  meet  the  demands  of  consumption,  and  no 
further. 

It  has  been,  during  the  year  1848,  alleged  that  the  low 
rate  of  duty  permitted  too  much  importation,  causing  a 
drain  of  specie,  and  that  the  exceedingly  low  prices  at 
which  goods  were  invoiced  were  breaking  down  our 
manufactures.  Much  that  is  here  assumed  of  large  im- 
ports as  attributable  to  the  low  tariff,  was  caused  by  the 
unsettled  state  of  Europe,  destroying  confidence  there,  and 
inducing  people  to  hurry  their  commodities  out  of  the 
country,  thrusting  them  upon  the  American  market,  in 
order  to  realize  something  from  what,  if  retained  at  home, 
they  were  apprehensive  would  be  totally  wrecked.  Under 
a  much  higher  tariff,  the  same  cause  would  have  produced 
the  same  effect,  though  to  a  less  extent.  But  the  effect, 


SPECIE  DRAIN.  97 

caused,  as  it  has  been,  principally  by  the  low  tariff,  and 
partially  by  the  disturbances  abroad,  has  not  been  injurious 
to  the  interests  of  this  country,  inasmuch  as  the  facts  go  to 
prove  the  truth  of  the  position  assumed  herein,  that  the 
amount  of  imports  must  call  forth  an  equivalent  amount  of 
exports  in  exchange,  and  if  we  have  got  a  large  supply  of 
foreign  products  at  low  prices,  we  have  paid  for  them  in 
the  products  of  home  industry,  and  simply  made  what  we 
should  rejoice  at — a  good  trade.  We  learn,  by  reference  to 
the  report  of  the  Secretary  of  the  Treasury  for  1848,  that 
during  the  fiscal  year,  excluding  specie,  foreign  imports 
were  consumed  to  the  value  of  $127,490,012,  and  that  the 
domestic  exports,  exclusive  of  specie,  exceeded  that  sum 
by  $2,713,697.  With  reference  to  the  charge  of  break- 
ing down  our  manufactures,  their  flourishing  condition 
belies  the  assertion.  Under  the  actual  circumstances,  we 
see  that  no  "  ruin"  has  been  wrought,  no  injurious  drain 
of  specie  has  occurred.  Evidence  of  the  truth  of  this 
proposition  exists  in  the  fact  that  on  the  first  of  January, 
1848,  the  price  of  United  States  Treasury  Notes  in  the 
New  York  market  was  99,  and  at  this  present  writing,  on 
the  first  of  December,  of  the  same  year,  they  are  sell- 
ing for  108.  Balances  have  simply  been  adjusted,  and  a 
profitable  trade  has  flourished  under  the  auspices  of  an  ap- 
proximation to  free  exchange. 


XIII. 

CURRENCY    DERANGEMENT. 

RETREATING  from  the  positions  of  necessity  for  pro- 
tection, on  the  score  of  sustaining  manufacturing  inte- 
rests, to  secure  the  independence  of  national  labor  against 
the  influx  of  foreign  pauper  labor,  and  prevent  the  indus- 
trial death  to  ensue  from  the  producing  competition  of 
more  advanced  nations :  on  the  ground  of  saving  the 
tribute  to  foreign  countries,  paid  when  a  balance  of  trade 
lies  against  the  country,  and  drains  its  specie — protection 
seeks  an  argument  in  the  alleged  evils  resulting  from  a 
deranged  currency. 

A  protective  tariff  is  required,  it  is  said,  to  restrict 
importations  to  an  amount  not  exceeding  the  exports,  lest 
the  drain  causes  a  contraction  of  the  currency,  the  effects 
of  which  bring  ruin  to  the  commercial  interests.  Protec- 
tionists know  that  commerce  would  derive  untold  benefits 
from  the  universal  adoption  of  free  trade,  therefore  cannot 
be  candid  when  urging  the  commercial  interest  to  oppose 
it.  They  are,  then,  placing  themselves  in  a  position  where 
they  are  liable  to  the  accusation  of  adroitly  seeking  an 
argument  that  may  enlist  this  class  against  free  trade, 
before  it  shall  have  fully  tasted  of  its  benefits.  It  is  under 
the  protective  regime  that  crises  are  produced.  With  the 


CURRENCY  DERANGEMENT.  99 

foreign  markets  shut  against  our  products,  every  slight 
excess  of  a  forced  home  production  depresses  prices  and 
disturbs  the  currency.  With  our  markets  closed  against 
foreign  products,  every  decrease  of  our  own  from  any  of 
the  many  causes  that  effect  such  a  result  likewise  produces 
its  revulsion.  There,  then,  exist  no  outlets  and  inlets 
through  which  the  troubled  waters  of  trade  may  seek  their 
level. 

Generally,  those  who  advocate  protection  as  better 
economic  policy  than  its  opposite,  also  approve  of  a  system 
of  currency  that,  overstepping  the  limits  of  the  universally 
acknowledged  representative  of  value,  specie,  adds  to  it 
and  substitutes  a  circulating  medium  of  merely  local 
value  ;  and  which  creates  a  widely  diffused  system  of 
credit.  This  engenders  losses,  and  aggravates  whatever 
evil  direction  the  course  of  trade  may  take.  Though 
speculation  may  originate  in  the  relative  proportions  borne, 
or  expected  to  be  borne,  towards  each  other,  by  supply  and 
demand,  we  always  see  in  times  of  immoderate  specula- 
tion a  large  increase  of  bank  issues. 

And  though  the  call  for  credit  may  originate  in  the 
growth  of  business,  or  in  the  spring,  to  compass  the  stretch 
of  an  opening  trade,  the  expansive  currency  and  its  conse- 
quent extended  credit  operate  upon  production  and  mar- 
kets in  subsequent  stages,  by  catching  up  the  speculative 
spirit,  and  carrying  it  along  with  new  vigor  that  heightens 
results,  prolonging  and  extending  the  movements  until 
contractions  must  necessarily  be  more  violent  when  they 
do  come.  With  this  condition  of  its  effects  in  view,  I  will 
enter  into  a  limited  analysis  of  the  character  and  effects  of 
an  expansive  currency ;  sensible  that,  of  all  the  problems 


100  INDUSTRIAL    EXCHANGES. 

contained  in  the  economic  science,  it  is  perhaps  the  furthest 
from  solution. 

Money,  we  have  seen,  is  valuable  only  so  far  as  it 
represents  the  consumable  products  of  industry ;  therefore, 
to  increase  the  circulating  medium  is  not  increasing  the 
wealth  of  a  people.  The  law  of  demand  and  supply 
determines  value,  controlled  by  the  law  of  cost  of  pro- 
duction, in  the  case  of  money,  as  of  most  other  things.  It 
is  not,  strictly  speaking,  the  abundance  of  money,  but  of 
credit,  that  raises  prices.  Credit,  however,  is  employed  to 
a  much  greater  extent  as  a  means  of  purchase,  when  bank 
notes  are  used,  than  when  the  individual  seeks  it  directly, 
as  they  are  credited  out  to  individuals  on  discount  notes, 
and  thence  the  credit  is  repeated  with  each  transmission  of 
the  paper  currency  from  one  individual  to  another.  Each 
of  these  has  obtained  a  credit  for  the  amount,  when  he 
could  not,  perhaps,  have  obtained  it  directly  upon  his  own 
responsibility ;  and  if  he  had  credit  of  his  own,  it  is  not 
impaired,  but  can  be  used  in  addition  to  the  use  he  has  of 
the  bank's,  which  is  thus  multiplied  to  an  almost  indefinite 
extent.  Money,  specie,  has  the  same  power  of  multiply- 
ing purchases,  but  costing  more  to  produce,  and  existing 
in  smaller  supply,  its  value  is  greater  than  that  of  bits 
of  paper,  and  the  value  of  commodities  is  proportionally 
lower.  Banks,  when  they  issue  three  representations  of  a 
dollar  for  one  of  money  deposits,  produce  the  effect  of 
quadrupling  the  purchasing  power,  which  consists  then  of 
one  of  money  and  three  of  credit.  In  addition,  the  credit 
exists  which  is  independent  of  that  attaching  to  the  bank 
notes. 

When  the  bank  notes  are  added  to  the  currency,  all  the 


CURRENCY  DERANGEMENT. 


101 


subsequent  holders  of  the  notes  suffer  a  loss  equivalent 
to  what  is  gained  by  the  issue.  This  is  by  the  deprecia- 
tion of  the  value  of  the  currency.  There  is  an  off-setting 
rise  in  the  value  of  commodities.  The  gains  made  by 
operators,  who  obtain  from  the  banks  the  loans  for  enlarg- 
ing their  business,  are  a  portion  of  the  banks'  gain ;  and 
these  thus  divide  the  profit  made  by  them  off  from  the 
community  at  large — the  consumers — the  loss  of  the  many 
balancing  the  gain  of  the  few. 

The  analogy  between  the  effects  of  protection  and  bank 
issues,  in  the  rise  in  value  in  commodities  caused  by  each, 
explains  the  affinity  between  these  schemes  of  national 
tinkering.  It  is  said  that,  from  the  banks,  producers  get 
loans  whereby  to  effect  increased  production  and  employ- 
ment for  labor ;  but,  as  when  on  one  side  of  the  scale  the 
increased  sum  of  money  depreciates,  and,  on  the  other, 
the  prices  of  productions  go  up  ;  and  as,  when  the  imme- 
diate producers  and  circulators  of  the  enlarged  amount  of 
money  profit,  it  is  at  the  expense  of  the  community  at 
large,  to  whom  the  money  is  depreciated  and  commodities 
made  dearer ;  as  these  are  the  facts,  it  is  clear  that  the 
paper  currency  effects  the  same  forcing  of  production,  for 
the  benefit  of  a  limited  number  of  producers,  that  is 
effected  by  high  tariffs;  and,  in* like  manner,  at  the 
expense  of  consumption.  High  tariffs  raise  the  value  of 
certain  commodities,  and  lower  others  proportionally.  A 
paper,  when  added  to  a  specie  currency,  similarly  raises 
the  value  of  certain  commodities,  and  lowers  another — 
money — proportionally. 

With  the  increase  of  paper  money  in  a  country,  the 
specie  circulation  will  diminish.  All  the  saving  and 
hoarding  will  be  of  the  specie,  as  most  persons  prefer 


102  INDUSTRIAL   EXCHANGES. 

keeping  the  hard  to  the  paper  money,  to  which  more  or 
less  of  suspicion  always  attaches  in  the  minds  of  the 
people,  who  will  use  it  as  currency  in  all  their  necessary 
payments.  With  the  increase  of  paper  money,  the  amount 
of  specie  contained  in  a  country  will  be  diminished.  The 
addition  it  makes  to  the  currency,  raising  prices  and 
causing  enlarged  importations,  will  carry  off  the  specie  as 
a  paying  commodity.  This  inequality  of  imports  and 
exports  will  soon,  however,  become  equalized  under  the 
equilibrating  laws  of  trade ;  but,  in  consequence  of  the 
introduction  of  this  third  element  of  paper  money,  it  will 
not  be  until  the  specie  shall  have  been  exported  to  an 
extent  that  will  reduce  the  sum  of  money  that  created  the 
high  prices  by  as  much  as  the  amount  of  excess  which 
caused  the  rise,  leaving  the  same  amount  of  money  in  the 
country  that  there  was  before  the  creation  of  the  paper 
money.  The  difference  will  then  be,  that  the  money  will 
not,  as  before,  be  all  specie,  but  one  half  specie  and  one 
half  paper,  supposing  that  to  have  been  the  proportion 
originally  borne  by  the  paper  creation  to  existing  specie. 
Just  to  the  amount  of  the  paper  issue,  the  specie  that  before 
was  held  in  the  country  as  a  circulating  medium  will 
have  been  exported  as  a  commodity  in  exchange  for  other 
commodities,  and  paper  will  be  retained  as  currency  in  its 
place.  The  production  of  the  paper  leaves  so  much  of 
specie  to  go  out  as  a  product,  while  it  glides  into  the  place 
before  occupied  by  the  specie  as  currency. 

And  hence  it  is  that  much  reason  may  appear  to  exist 
for  the  creation  of  a  widely-diffused  paper  currency,  that 
through  the  creation  of  a  fabric  of  credit,  which,  in  turn, 
is  used  as  capital,  shall  effect  production.  This  has  been 
already  answered  ;  but  again  inquire  if  the  process  does 


CURRENCY  DERANGEMENT.  103 

so  securely,  permanently,  and  progressively !  I  have 
supposed  it  to  extend  to  one-half  the  original  sum  of  cur- 
rency, which  was  presumed  to  have  been  entirely  of 
specie.  If  it  stops  there,  the  creation  of  paper  leaves  an 
equivalent  sum  of  specie  as  a  redeeming  basis,  and, 
admitting  the  improbable  supposition  of  no  failure  or  fraud 
in  producers,  there  is  security.  But  there  is,  at  the  same 
time,  no  permanence  or  progression,  for  it  must  cease 
when  half  the  specie  is  exported ;  and  the  volume  of 
currency  not  being  increased,  to  obtain  progressive 
improvement  requires  an  amount  of  paper  currency 
exceeding  the  sum  of  specie  retained,  and  one,  too,  that 
shall  be  equal  in  actual  value  to  the  nominal  value  it 
expresses. 

When  the  issue  of  paper  money,  in  order,  by  credit,  to 
increase  capital,  does  not  stop  at  an  equal  amount,  but 
exceeds  the  sum  of  specie  retained,  security  is  endangered 
in  a  ratio  with  the  excess  of  paper  currency.  When  it 
equals  or  exceeds  the  entire  sum  of  gold  originally  used  as 
currency,  only  the  value  of  the  specie  actually  exported  is 
supplied  by  the  paper  creation,  not  a  specie  value  equal  to 
the  nominal  amount  of  paper  issued  ;  and  all  of  the  issue 
over  and  above  the  value  of  the  specie  exported,  merely  sup- 
plies the  place  of  the  depreciation.  Thus,  if,  80,000,000 
of  gold  existed  in  the  country  as  currency,  and  50,000,000 
is  exported,  in  consequence  of  the  creation  of  40,000,000 
of  paper  money,  supposing  security  and  no  depreciation, 
the  first  proposition  is  exhibited,  and  no  gain  is  perceptible 
in  amount  of  money  or  production.  Then,  if  an  increase 
of  eighty  swells  the  paper  creation  to  120,000,000,  the 
whole  of  the  nominal  120  millions,  and  whatever  fraction 
of  the  previous  40,000,000  of  gold  remains  as  its  basis, 


104  INDUSTRIAL    EXCHANGES. 

are  together  of  no  more  value  than  the  original  80  mil- 
lions of  gold  currency  were  before  any  issue  of  paper  was 
made. 

Then,  there  being  no  additional  actual  value,  will  there 
be,  in  fact,  any  permanent  and  progressive  improvement 
effected  by  this  substitution  of  a  large  sum  of  paper  for  a 
smaller  one  of  specie  currency  ?  It  is  not  probable  that, 
after  the  first  moment,  when  the  markets,  taken  by  surprise, 
as  it  were,  will  not  have  lifted  prices,  the  increase  of  cur- 
rency will  stimulate  industry  to  the  accomplishment  of 
any  effective  enlarged  production.  With  the  increase  of 
money  comes,  it  is  true,  a  rise  of  prices.  But  the  rise  is 
general ;  and  all  the  outgoes  for  material,  labor,  &c.  &c., 
of  all  producers  rise  with  their  incomings,  and  they  re- 
ceive no  more  remuneration  than  before.  They  soon  un- 
derstand this,  and  then  there  will  be  no  more  enterprise 
awakened,  and  capital  called  into  action  than  previously, 
under  a  smaller  volume  of  currency. 

We  may  learn,  by  past  experience,  that,  on  the  other 
hand,  a  cessation  in  the  increase  of  the  paper  currency  of 
corporate  bodies,  even  a  degree  of  diminution,  does  not 
effect  a  diminution  of  production.  In  1837,  the  bank  cir- 
culation of  the  State  of  New  York  was  $24,198,000  ;  in 
1848  it  was  $23,047,826.  Yet  New  York  has  not  stood 
still  during  that  period  of  eleven  years ;  industrially  she 
has  progressed  with  a  sufficient  degree  of  rapidity  to 
satisfy  the  desires  of  any  reasonable  amount  of  enterprise. 
The  theory  of  increased  production  being  set  aside, 
there  may  be  another  reason  advanced  for  the  existence  of 
paper  currency.  The  creation  of  a  value  for  commodi- 
ties, or  rather  the  regulation  of  value  by  government,  may 
be  said  to  be  desirable,  provided  enough  specie  be  retained 


CURRENCY  DERANGEMENT.  105 

for  foreign  balances.  Besides  the  absolute  value  of  specie 
created  by  its  cost  of  production,  is  the  relative  value  of 
supply  and  demand.  And  this  variable  of  demand  in  money 
is  effecting  a  constant  change  in  the  value  of  commodities, 
or  rather  is  the  effect  of  variations  in  the  supply  of  and  de- 
mand for  money  and  commodities ;  therefore,  if  the  cur- 
rency possesses  no  other  value  but  the  relative,  it  will  be 
better  adapted  to  sliding  backward  and  forward  upon  the 
scale,  with  the  supply  and  demand  of  commodities  repre- 
sented by  it,  than  if  incumbered  with  the  absolute,  which 
imparts  to  specie  the  fixidity  of  value  that  prevents  such 
accommodation  to  circumstances  of  trade  or  speculation. 
Hence,  if  the  banks  were  so  organized  and  conducted  that 
their  issues  would  be  safe,  and  would,  when  specie  is 
scarce  and  high  in  the  country,  emit  a  sound  circulation, 
that  should  supply  just  enough  currency  to  counteract  the 
deficiency  of  specie,  and  prevent  the  value  of  money  from 
rising  ;  and,  on  the  other  hand,  when  specie  was  pouring 
into  the  country,  and  money  plenty,  should  contract  their 
issues,  to  prevent  money  from  cheapening,  thus,  by  their 
double  action,  preventing  the  rise  and  fall  of  prices,  the 
fixidity  of  specie  as  a  currency  might  be  advantageously 
accommodated  to  the  variations  in  demand  and  supply  of 
commodities.  Likewise  when  money  is  plenty,  from  the 
prevalence  of  credit,  under  the  speculative  spirit  of  enter- 
prise, when,  to  a  great  extent,  individual  credit  supersedes 
the  place  of  money,  bank  paper  issues  might  prevent  the 
undue  rise  of  property,  and  fall  of  money  ;  and  the  ex- 
pansion, on  the  other  hand,  might  ease  the  market,  when  a 
wish  to  realize,  and  the  necessity  for  means  to  meet  en- 
gagements, had  produced  a  diminution  of  individual  credit. 
Those  who  believed  such  to  be  the  true  theory,  would 
5* 


106  INDUSTRIAL   EXCHANGES. 

perhaps  qualify  their  assent  to  it  by  urging  the  necessity 
for  retaining  a  sufficiency  of  specie,  to  secure  the  stability 
of  the  currency ;  and  further  urge  the  imposition  of 
guards  and  checks  innumerable,  to  prevent,  if  possible, 
the  recurrence  of  the  scenes  of  fraud,  of  mismanagement, 
and  consequent  losses, .  destruction,  and  attendant  evils, 
which  have  indelibly  stained  the  pages  of  banking  history, 
with  the  sanguinary  and  dismally  infamous  marks  of  rouge 
et  noir. 

Or,  discarding  the  general  banking  by  issue,  they 
would  needs  refer  the  creating  and  administration  of  such 
a  paper  currency,  entirely  to  the  government,  federal  or 
imperial,  and  seek  some  method  of  National  banking,  that 
should  escape  the  fate  of  the  French  assignats.  When 
some  such  method  shall  have  been  prepared  and  practised 
successfully  in  some  quarter  where  trade  and  speculation 
abound,  or  when  an  unobjectionable  plan  may  be  presented, 
we  will  consider  it  more  fully  than  we  shall  do  here. 
Reference  will  be  again  made  to  it,  however,  in  this 
chapter. 

What  are  the  facts  of  the  past  that  indicate  the  part 
taken  by  currency  in  the  inflations  and  contractions  of 
markets  ?  Has  the  quantity  of  paper  currency  slidden  back- 
ward and  forward  with  the  supply  and  demand  of  com- 
modities ?  In  other  words,  has  the  currency  expanded 
and  contracted  inversely  with  credit  ?  The  complaints 
frequently  heard  from  those  men  of  business,  who  at- 
tribute their  failures  to  a  contrary  course  having  been 
pursued  by  the  late  United  States'  Bank,  furnish  a  negative 
reply  so  emphatic,  that  a  National  Bank  has  been  almost 
universally  denominated  an  exploded  idea.  Banks  in 
general  seem  heretofore  to  have  glided  with  the  current 


CURRENCY  DERANGEMENT.  107 

rather  than  stemmed  it.  As  well  as  one  can  see,  experi- 
ence has  taught  that  all  the  theories  heretofore  practised 
have  been  wrong,  and  we  feel  cautious  about  casting  away 
the  absolute  value,  when,  in  all  the  mischief  wrought  by 
relative  value,  it  appears  as  though,  had  it  not  been  for  the 
leaven  of  absolute,  the  evil  might  have  been  greater. 

It  is  capital  that  causes  production — it  is  the  opera- 
tion of  buying  and  selling  that  creates  demand  for  money — 
it  is  profits  that  cause  interest.  The  buying  and  selling 
call  capital  into  use,  a  necessity  for  which  use  on  capital's 
part  urges  it  to  the  buying  and  selling  either  in  trade,  that 
exchanges  commodities,  or  in  production,  that  buys  labor 
and  sells  the  product.  The  profits  yielded,  call  for  more 
money,  and  pay  interest.  Interest,  therefore,  is  secondary 
to  profits.  The  original  movement  is  that  of  buying  and 
selling ;  the  bank  loans  upon  interest  succeed  upon  this. 
Therefore  it  is  that  the  past  has  furthermore  taught  us, 
that  although  much  mischief  is  owing  to  the  character  of 
the  currency — though  its  inflations  aid  in  keeping  up  a 
spirit  of  speculation — and  although,  under  the  cramping 
effects  of  restriction  upon  trade,  any  currency  is  more 
sensitive  than  under  freedom  of  exchange ;  the  broad  fact 
is,  that  it  is  not  to  currency  we  are  to  attribute  the  origin  of 
those  trading,  railway,  and  other  speculations,  that  result 
in  crises.  They  probably  originate,  in  most  cases,  in  the 
accumulations  of  capital,  that  have  succeeded  upon  a  term 
of  good  production,  causing  capitalists  to  become  dissatis- 
fied with  the  comparatively  low  rate  of  interest,  ruling 
under  a  plethoric,  easy,  jog-trot  state  of  business.  Enter- 
prise seeks  to  invest  in  new  sources  of  production,  in  trad- 
ing operations,  or  in  large  and  costly  improvements,  that 
shall  become  fixed  capital,  and  pay  a  higher  rate  of  inter 


108  INDUSTRIAL   EXCHANGES. 

est  upon  the  investment.  The  propensity  to  follow  where 
others  lead,  then  comes  into  exercise.  Lured  by  the  pros- 
pect of  new  avenues  for  investment,  opening  to  view  and 
promising  rich  returns  of  profits,  the  circulating  capital  is, 
much  of  it,  drawn  from  the  channels  of  business,  and  fixed 
with  the  surplus  capital,  in  an  inconvertible  form  (some- 
times the  growing  demands  of  business  call  for  improve- 
ments, like  railways  that  sink  much  capital)  ;  the  capital 
getting  short,  credit  is  resorted  to  for  fuel  to  feed  the  fire 
of  speculative  fever. 

It  is  at  this  stage  that  paper  currency  inflations,  caused 
by  acquiescing  in  the  demand  for  money  and  credit,  step 
in  and  place  the  capital  of  credit  in  a  form  accessible  by 
all,  divisible  to  any  extent,  and  representing  all  species  of 
property,  in  all  men's  hands,  to  aggravate  the  mischief. 
Even  more,  not  waiting  for  a  demand,  banks  offer  their 
currency  for  use.  It  is  well  known  that  in  times  of 
speculation  bank  directors  have  gone  round  with  the 
question  and  offer,  "  Have  you  no  notes  to  throw  in 
to-day  ?  We  are  ready  to  discount."  In  a  country  like 
this,  where  almost  every  man  has  some  property,  and 
therefore  credit,  such  a  state  of  things  causes  the  specula- 
tive mania  to  spread  like  a  conflagration  in  a  wooden  city, 
reaching  and  engulphing  all  far  and  near.  Much  is 
invested  in  the  newly  promising  branches  of  trade  and 
production ;  and  credit  is  added  here  too,  until  it  becomes 
exhausted  in  all  directions,  because  capitalists  have  begun 
to  think  it  time  to  realize.  Then  people  begin  to  look 
about  them  for  means  with  which  to  meet  obligations 
swelled  to  an  enormous  extent,  because  people  would  be 
as  enterprising  as  their  neighbors.  But  there  is  not 
money  enough.  A  distrust  of  the  value  of  every  kind  of 


CURRENCY  DERANGEMENT.  109 

property,  but  money,  causes  every  one  to  seek  to  obtain  it. 
The  causes  named  are  sometimes  aided  by  large  invest- 
ments in  imaginary  cities,  parcelled  out  upon  paper  to 
eager  speculators.  All  combined,  and  sometimes  either 
of  them,  are  sufficient  to  absorb  the  circulating  capital 
previously  employed  in  business,  and  run  everybody  into 
debt  beyond  their  capital  to  the  extent  of  their  credit. 
Capital  has  been  much  of  it  spent  in  unproductive  invest- 
ments.  During  the  rise  of  speculation  the  rapidity  with 
which  money  changed  hands  made  a  given  amount  much 
more  effective  ;  then,  also,  with  money  easy,  credit  was 
admitted  to  be  used  as  capital ;  but  now,  during  the  fall, 
the  suspended  circulation  caused  by  panics  makes  a  given 
amount  do  but  little  service  ;  and  when  money  is  felt  to  be 
scarce,  credit  is  thrown  out.  Interest  is  high  enough  now 
for  capitalists,  but  there  are  fewer  of  them,  and  those  who 
have  money  are  cautious  when  everybody's  credit  is 
gone.  There  is  no  money  to  be  had  by  those  who  are 
looking  about  them  for  means  to  meet  the  excessive 
liabilities  incurred  in  speculating,  and  but  little  for  those 
who  wish  to  continue  the  productive  investments  even  in 
old  jog-trot  avenues  of  business ;  and  production  is,  for  a 
time,  much  diminished  from  the  standard  in  existence 
before  the  speculation  commenced.  People  will  follow 
their  neighbors ;  the  imitativeness  is  now  carrying 
thousands  to  California  to  dig  gold.  These  fits  always 
take  the  name  of  fevers,  because  of  their  contagious 
nature. 

Such  is  a  brief  history  of  the  rise,  progress,  and  fall  of 
the  speculative  mania,  as  it  has  exhibited  itself  at  different 
times.  But  the  rains  descend  to  distribute  their  fertilizing 
effects,  and  the  earth  yields  of  its  produce,  and  capital 


110  INDUSTRIAL   EXCHANGES. 

again  accumulates,  slowly  at  first,  then  more  rapidly. 
We  must  believe  that  while  man  accumulates  capital  and 
continues  to  possess  the  quality  of  enterprise,  speculative 
fluctuations  in  business,  and  their  effects  of  gains  and 
losses,  will  not  cease  to  afflict  him.  All  the  governmental 
tinkering  will  be,  as  it  has  heretofore  proved  to  be,  mere 
vagaries  of  quack  politicians  that  leave  but  one  result — 
the  old  condition  of  things  joined  to  a  universal  sentiment 
that  that  plan  was  not  the  right  one.  Is  it  not  better  to 
leave  all  the  movements  of  trade  and  currency  to  them- 
selves ;  to  leave  all  fortune  making,  all  accumulations  of 
capital,  whether  of  property  or  credit,  to  the  exertions  of 
individual  members  of  the  state,  gentlemen  tinkers  of  the 
Legislature  ?  By  protecting  in  various  ways  you  only 
promote  those  inequalities  of  accumulation  that  make  two 
classes,  one  eager  to  lend  and  the  other  anxious  to  borrow. 
Let  individuals  furnish  credit  to  others  if  they  please,  it  is 
their  own  business ;  there  will  be  none  the  less  failures 
because  government  so  far  endorses  their  notes  as  to 
charter  their  issue.  The  earth  is  productive,  and  real 
capital  and  private  credit  are  rapidly  increasing  without 
your  assistance.  It  is  the  negative  assistance  of  laissez 
faire,  not  the  active,  that  is  efficient.  Two  causes  of 
fluctuations  already  exist ;  you  only  add  other  causes  to 
them.  A  high  tariff  to  prevent  importations,  forsooth  ! 

I  have  said  that  the  equilibrating  laws  of  trade  will 
equalize  the  imports  and  exports  ;  but  the  continuation  of 
paper  issues  will  retard,  even  until  the  period  of  collapse 
and  general  bankruptcy,  the  regulation  of  international 
exchanges,  which  is  to  be  accomplished  by  a  fall  in  prices 
of  imported  commodities,  because,  as  long  as  banks 
continue  to  issue,  money  will  be  plenty  and  prices  high 


CALIFORNIA  GOLD.  Ill 

in  the  country  where  paper  is  produced.  If  interest 
would  rise,  gold  might  be  retained  in  the  country  for 
investment  at  the  high  rates ;  but  interest  will  be  low  as 
long  as  the  issues  continue.  The  low  interest  and  high 
prices  combine  to  accelerate  the  progress  of  the  excessive 
action  in  all  departments  of  business,  and  the  realization  of 
a  commercial  crisis. 

The  recent  development  of  an  apparently  inexhaustible 
quantity  of  gold  in  California  has  been  compared  to  a 
large  issue  of  paper  money.  The  supply  is  expected  to 
cheapen  money  and  inflate  prices  here  until  overwhelming 
quantities  of  foreign  commodities  shall  crush  our  industrial 
enterprises,  when  a  reaction  will  find  us  deprived  of  the 
ability  to  produce,  and  leave  trade  the  prey  of  bankruptcy. 
Such  reasoning  is  entirely  chimerical,  and  the  cases  will 
not  be  found  analogous  in  their  effects.  The  gold,  unlike 
a  home-produced  paper  currency,  possessing  a  universal 
value,  governed  by  cost  of  production,  will  flow  oat  of  the 
country  as  it  is  produced,  and  distribute  itself  among  all 
nations,  occupying  universally  the  same  relative  value  to 
commodities  that  it  does  now,  subject  to  such  general 
depreciation  in  its  value  as  may  be  effected  by  the  amount 
of  addition  to  supply.  Distributed  as  the  gold  will  be 
throughout  the  world,  such  additional  supply  must  be 
immense  in  order  to  effect  even  a  small  general  depre- 
ciation of  the  value  of  gold  currency  and  counter  appre- 
ciation in  prices  of  commodities. 

The  value  of  gold  and  silver  now  in  the  world  is 
estimated  by  Mr.  Senior  at  2,000  millions  of  pounds 
sterling.  What  was  added  to  it  from  all  sources  previous 
to  the  California  development,  including  the  $15,000,000 
annually  produced  by  the  rich  mines  of  the  Ural  (esti- 


112  INDUSTRIAL   EXCHANGES. 

mated  at  the  extremely  large  production  of  1846,  but 
which  for  27  years  had  been  only  $125,000,000),  has 
been  only  sufficient  to  supply  the  deficit  the  precious 
metals  are  continually  undergoing  from  loss,  wear,  and 
use  in  the  arts.  The  per  centage  of  increase  in  these 
three  influences  would  increase  with  the  addition  to  the 
amount  of  the  gold  produced ;  and  whenever  a  sensible 
depreciation  in  its  value  as  coin  began  to  be  felt,  the  per 
centage  of  increase  in  that  portion  used  in  manufacturing 
articles  for  luxury  and  use  would  greatly  enlarge  itself, 
keeping  the  value  of  coin  at  a  high  standard,  but  little,  if 
any,  below  the  present  point. 

The  annual  loss  referred  to  has  been  estimated  at  one- 
half  of  one  per  cent.,  which,  upon  the  gross  amount  of  the 
precious  metals  in  possession,  amounts  to  $50,000,000. 
If  the  labor  of  16,000  men  was  employed  in  procuring  afti 
average  amount  to  each  man  of  ten  dollars  each  per  day 
in  perpetuity,  the  produce  would  only  add  as  much  to  the 
quantity  as  the  annual  loss  now  sustained.  Such  a  pro- 
duct is  altogether  improbable,  rich  as  the  deposits  promise 
to  be  ;  and  if  it  were  realized,  the  fact  of  their  great  pro- 
ductiveness would  draw  off  from  other  regions  less  produc- 
tive the  labor  now  expended  there,  in  this  manner,  aided 
by  the  per  centage  of  increase  in  manufactures,  still  sub- 
tracting from  the  general  increase ;  also  changing  the 
locality  of  production.  In  view  of  the  principles  and 
circumstances  named,  the  realized  addition  of  what  is 
probably  to  be  less  than  one-half  of  one  per  cent.,  will  be 
too  insignificant  to  affect  materially  the  value  of  the  pre- 
cious metals.  We  must  also  recollect  that  a  stimulus  to 
productive  industry  will  be  called  forth  by  this  specie 
product  in  its  demand  for  exchangeables ;  and  the  general 


CURRENCY  DERANGEMENT.  113 

development  and  increase  of  production,  population,  and 
trade  throughout  the  world  will  eventuate  the  absorption 
of  the  added  amount  of  coin  in  the  enlarging  trade. 

From  what  has  preceded,  we  determine  that  the  currency 
problem  resolves  itself  into  the  complex  question  of  kind 
and  volume.  Of  the  kind,  specie  only  appears  to  be  secure. 
Supposing  that  kind  adopted,  the  proposition  presents  itself 
to  increase  credit  by  enlarging  the  volume  of  currency. 
Also  the  volume  must  possess  expansile  and  contractile 
powers,  to  meet  the  corresponding  movement  in  demand. 
These  advantages  in  posse  are  a  strong  temptation,  but 
they  involve  a  change  of  kind.  Specie  and  volume  are 
incompatible.  On  one  hand  security  must  be  sacrificed ; 
on  the  other,  expansion  of  credit.  The  incompatibility  of 
maintaining  the  exclusive  specie  currency  with  the  ex- 
panded credit,  has  brought  about  the  mixed  currency, 
involving  a  condition  of  partial  security  through  the 
retention  of  a  portion  of  specie,  and  of  partial  expansion 
through  the  adoption  of  a  limited  volume. 

Is  the  trans-specie  volume  indispensable  ?  A  volume 
loaded  with  the  three  conditions  of  an  injuriously  exercised 
expansile  and  contractile  power;  with  a  depreciation 
progressing  with  its  increase  that  causes  reduced  value  to 
neutralize  additional  nominal  amount ;  and  with  its  fearful 
insecurity. 

If  the  condition  of  a  large  proportion  of  banking  institu- 
tions be  regarded  at  any  given  point  of  time,  it  is  certain 
to  excite  a  sense  of  insecurity.  Four  hundred  millions  of 
dollars  is  the  estimated  amount  of  loss  sustained  by  the 
people  of  the  United  States  within  the  last  twenty  years, 
caused  by  the  explosions  of  paper-issuing  banks.  Could 
the  balance  be  fairly  struck  between  the  gains  and  losses 


114  INDUSTRIAL   EXCHANGES. 

from  the  use  of  paper  money,  it  is  probable  the  latter 
would  preponderate. 

For  the  purpose  of  holding  the  proper  progress  of  credit 
at  a  pace  in  keeping  with  the  permanent  advance  of  the 
credit  basis,  in  other  words,  with  the  growth  of  production 
and  accumulation  of  property,  a  successful  conservation 
has  not  been  and  could  not  be  uniformly  practised  under 
existing  systems  of  banking. 

The  credits  that  have  been  called  into  action  in  effecting 
the  great  canal,  railway,  and  other  improvements  that 
become  fixed  capital,  are  not  bank  credits. 

Applying  the  test  of  consumption  to  the  past,  we  are 
forcibly  reminded  of  the  fable  of  the  tortoise  and  the  hare, 
and  it  suggests  caution  for  the  future,  whilst  forcing  a 
conviction  that  security  and  permanence  are  of  more 
importance  than  expanded  volume ;  for  whatever  the 
volume,  society  will  adapt  itself  to  it. 

For  the  future,  probably  it  would  be  a  work  of  super- 
erogation to  hope  that  the  march  of  knowledge  may  render 
the  existence  of  a  limited  amount  of  chartered  paper 
money  compatible  with  gain  to  the  community.  The  pro- 
gress of  economic  intelligence  will  probably  dispense  with 
its  use. 

The  sanguine  may  anticipate  a  future  improvement  by 
so  far  prohibiting  the  production  of  paper  money  as  to 
confine  the  issue  to  notes  of  large  denominations.  This 
change  would  be  so  far  beneficial  as  it  prevented  the 
circulation  of  anything  but  specie  among  the  poorer  class 
of  the  community,  who  have  heretofore  been  so  largely  the 
losers  by  small  notes  ;  but  the  ultimate  loss  would  as  usual 
fall  upon  labor,  and  it  would  not  prevent  the  speculative 
effects,  depreciation  of  money,  and  the  general  insecurity 


CURRENCY  DERANGEMENT.  115 

of  banking,  by  issue  and  deposit.  When  by  issue,  there 
is  still  the  fraud  of  a  note  professing  to  represent  a  value 
that  does  not  in  fact  exist. 

This  factitious  representation  being  always  committed 
when  more  bills  are  issued  as  representing  specie  than 
there  is  actually  specie  in  deposit,  the  mere  nominal  con- 
vertibility is  fraudulent. 

Even  supposing  the  banks  not  to  possess  the  issue,  but 
only  the  deposit  power,  there  is  danger  of  their  loaning 
deposits  to  the  extent  of  an  undue  expansion  of  credit, 
and  thereby  affording  an  encouragement  to  speculation 
productive  of  the  usual  deplorable  effects. 

With  these  evils  is  involved  a  sacrifice  of  the  interests 
of  depositors,  through  the  subsequent  inability  of  the  banks 
to  refund  the  deposits  unduly  loaned  under  strong  temp- 
tations of  a  high  rate  of  interest,  of  personal  influences,  or 
from  other  causes. 

In  respect  of  this  discount  and  deposit  department  of 
banking  institutions,  regarding  banks  as  reservoirs  for 
receiving  and  distributing  money ;  although  sound  credit 
is  a  substitute  between  individuals  for  capital  as  a  producing 
agent,  the  statistical  facts  teach  us  that  the  exchange  of 
products  has  been  greatest  when  bank  credits  were  least. 
Individual  credit  subserves  the  purposes  of  a  healthy 
business,  without  calling  to  its  aid  that  of  chartered 
companies.  In  1842  while  the  bank  loans  at  New  Orleans 
were  in  round  numbers  48,000,000,  the  value  of  produce 
received  at,  and  the  value  exported  abroad  from  that  city, 
were  together  73,000,000  ;  a  proportion  of  less  than  two 
of  business  exchanges  to  one  of  banking  facility  in  a  year 
of  large  loans.  In  1848,  when  the  loans  were  6,000,000, 
the  value  of  produce  was  119,000,000;  a  proportion  of 


116  INDUSTRIAL    EXCHANGES. 

nearly  twenty  to  one  in  a  year  of  small  loans.  In  four  of 
the  States  whence  the  produce  was  sent  to  New  Orleans, 
the  bank  loans  in  1842  amounted  to  111,000,000,  and  in 
1848  to  8,000,000.  As  exchange  is  the  effect  of  demand 
and  supply  operating  mutually  by  markets  calling  for 
products,  and  products  seeking  markets,  it  is  just  to 
conclude  that  there  has  been  an  inordinate  degree  of 
importance  attached  to  the  credits  furnished  by  banks, 
and  that  these  credits  are  a  less  efficient  agent  of  traffic 
than  is  generally  supposed. 

We  may  extend  the  subject  for  the  purpose  of  con- 
sidering its  connexion  with  state  and  government  banking, 
and  finding  a  more  complete  answer  to  the  indispensability 
of  volume. 

This  is  an  era  when  the  feudality  of  arms  has  sub- 
mitted to  the  feudality  of  capital,  and,  therefore,  in  a 
Republican  government  it  is  most  in  ^consonance  with  the 
spirit  of  its  institutions,  and  safest,  to  place  checks  upon 
that  domination  of  capital  over  labor  which  a  paper  money 
creating  power  is  so  well  calculated  to  effect.  A  means 
consistent  with  the  governing  principle  of  not  over-govern- 
ing, is,  for  the  government  to  collect  and  disburse  its  own 
revenues  in  specie,  leaving  the  credit-creating  power  of 
paper  issues  upon  specie  basis,  to  the  democracies  of  the 
several  states,  whose  action  in  the  premises  is  safest  when 
it  measures  the  issue  by  the  limit  of  convertibility ;  and 
this  is  equivalent  to  a  negation  upon  all  issues,  inasmuch 
as  it  is  better  to  circulate  the  specie  than  to  substilute  for  it 
an  equal  amount  of  paper,  losing  security  and  gaining 
nothing.  The  conclusion  is,  therefore,  against  the  State 
democracies,  as  well  as  the  Federal  government,  in  any- 
wise lending  their  assistance  to  the  production  of  paper 


CURRENCY  DERANGEMENT.  117 

money.  Not  even  so  far  as,  in  seeking  a  system  that  may 
admit  of  volume,  of  credit  capital,  without  sacrificing 
security,  they  permit  to  be  used,  as  a  basis  for  an  issue  of 
dollar  for  dollar,  property  other  than  specie,  as  under  the 
general  banking  law  of  the  State  of  New  York.  By  the 
provisions  of  this  law,  state  stocks  and  mortgages  are  per- 
mitted to  be  deposited  by  any  person  with  the  Comptroller, 
who  issues  the  bills. 

Under  this  system  abuses  have  been  practised,  by  means 
of  purchasing  with  the  bills  additional  stock,  and  upon  the 
addition  getting  a  new  issue  of  bills ;  in  this  manner, 
making  credit  to  reproduce  itself  in  arithmetical  pro- 
gression, instead  of  effecting  a  production  of  real  capital ; 
meanwhile  enriching  the  money  producer  by  means  of  a 
broad  series  of  issues  with  only  a  small  basis  of  real  value. 
Of  course  the  result  is  a  breaking  down,  and  a  widely  spread 
loss  to  the  consumers,  the  bill  holders. 

The  issue  of  paper  money  upon  a  specie,  or  property 
basis,  subject  to  partial,  or  entire  redemption,  furnishes  of 
itself  a  large  increase  of  credit.  When  another  revolution 
of  the  wheel  brings  a  further  issue  of  paper  money  based 
solely  upon  credit,  and  a  more  widely  spread  series  of 
credit  is  begotten  of  the  first,  the  interests  of  the  com- 
munity are  seriously  jeopardized.  Of  this  nature  are  the 
fiscal  schemes  which  are  occasionally  put  forward  for  the 
consideration  of  the  general  government,  as  panaceas  for 
all  the  ills  of  trade,  and  which  have  a  tendency  to  the 
centralization  that  is  effected  by  a  union  of  capital  and 
state,  wherein  the  feudality  of  capital  is  prone  to  dominate 
over  all  other  interests  of  the  community. 

The  creation  of  money  upon  a  credit  basis  is  no  new 
device.  But  the  bits  of  paper  being  dependent  upon  the 


118  INDUSTRIAL    EXCHANGES. 

ipse  dixit  of  government  for  their  value,  are  deprived  of  the 
advantage  of  the  governing  value  of  all,  cost  of  production. 
The  production  of  paper  money  upon  the  basis  of  state 
credit,  or  debt — which  has  a  basis  of  fixed  capital  in 
the  internal  improvements — by  individuals  or  companies 
authorized  to  do  so,  has  been  found  to  work  badly.  It  has 
been  infinitely  more  dangerous  when  governments  have 
directly  issued  a  currency  based  upon  their  own  credit, 
either  through  the  agency  of 'their  executive  officers,  or 
conjoined  with  a  banking  association.  The  history  of  the 
French  Assignats,  of  the  Austrian  issues  in  1812,  and  of 
the  United  States  Bank,  furnish  testimony  upon  these 
points.  It  is  known  that  the  British  government  counter- 
fited  the  assignats  in  great  quantities,  and  caused  them  to 
be  put  into  circulation  in  France  during  the  first 'revolution 
in  that  country,  effecting  a  destruction  of  confidence,  and 
accelerating  the  depreciation  by  which  tens  of  thousands 
were  robbed  of  their  possessions. 

I  have  referred  to  the  system  of  government,  collecting 
and  disbursing  its  revenues  in  specie.  Much  complaint 
has  been  made  of  the  stringent  effects,  and  it  may  be  con- 
sidered a  beneficial  provision  to  modify  its  action  by  the 
admission  of  a  few  millions  of  Treasury  Notes,  now  out- 
standing as  part  of  the  existing  national  debt,  into  perma- 
nent circulation  through  the  receipts  and  disbursements  of 
government  dues  and  payments,  as  a  means  of  preventing 
the  unwieldy  transmission  of  specie  in  exchanges,  and  the 
accumulation  of  large  sums  in  the  treasury  of  the  general 
government,  thereby  affording  relief  to  the  money  market 
by  permitting  its  flow  in  the  channels  of  business.  The 
stringency  has  been  beneficial,  and  whatever  advantages 
such  permission  might  confer,  there  would  be  great  proba- 


CURRENCY  DERANGEMENT.  119 

bility  of  their  being  neutralized  by  the  letting  up  of  that 
check  upon  bank  expansion,  which  is  the  effect  of  govern- 
ment holding  the  specie.  Also,  the  principle  once  admit- 
ted, the  original  sum  might  take  the  form  of  a  nucleus,  and 
such  "  amendments"  and  changes  effected  as  would  gra- 
dually run  it  into  an  engine  potent  for  evil.  With  a  public 
debt  existing,  such  modification  of  the  specie  principle 
would  doubtless  be  less  dangerous  than  the  practice  of  the 
general  receipt  and  disbursement  by  government,  of  bank 
issues.  But  the  public  debt  must,  in  time,  be  extinguished, 
and  there  is  something  ridiculous  in  a  debt  being  kept  up  for 
furnishing  a  representative  in  which  government  may  col- 
lect its  dues.  There  is  reason  to  doubt  the  necessity  of 
such  a  treasury  note  addition  to  the  money  of  the  coun- 
try for  the  purposes  of  business  relief.  On  a  proper  ex- 
amination of  the  subject,  it  will  be  seen,  that  on  a  much  more 
extended  scale  than  the  previously  cited  case  of  the  busi- 
ness at  New  Orleans,  the  specie  retained  in  this  and  other 
countries  has  been  greater,  that  is  to  say,  the  amount  cir- 
culated for  purposes  of  trade,  has  been  less  in  years  of 
large  exchange,  than  in  years  of  small.*  Hence  it  would 

*  "England.            France.  N.York.  Total  specie  in  banks. 

"Jan.  1842  26,010,000  41,230,000  4,074,601  71,314,601 

1843  54,665,000  43.182,000  6,174,317  104,021,317 

1844  81,610,000  52,600,220  10,206,542  144,416,762 

1845  70,920,000  48,965,048  6,893,236  126,778,284 

1846  65,172,200  47,250,100  8,361,383  120,783,683 

1847  72,130,240  14,913,967  9,191,254  96,235,461 

1848  65,371,820  36,182,734  6,751,338  108,305,892 

"  The  largest  amount  held  by  all  the  banks  was  in  1844,  and  that  was 
a  year  of  general  prosperity.  The  amount  of  specie  then  in  the  insti- 
tutions being  large,  a  less  quantity  was  of  course  in  circulation.  In 
October,  1847,  however,  after  the  disastrous  failures  and  loss  of  confi- 
dence in  England,  specie  became  in  demand  for  use,  and  it  left  the 
bank  vaults." — DeBow's  Commercial  Review. 


120  INDUSTRIAL    EXCHANGES. 

appear,  that  there  is  much  specie  lying  out  of  use,  in  sea- 
sons of  large  business,  and  that  enough  is  in  existence  for 
the  necessary  purposes  of  settling  balances  of  trade.  And, 
for  'the  purpose  of  facilitating  the  transmission  of  funds, 
it  appears  that  the  use  of  individual  credits  and  means  is 
sufficient. 

In  fact,  it  is  by  means  of  individual  credits  that  business 
is  principally  carried  on,  the  proportion  of  not  only  specie 
but  of  any  money  in  use  being  small  compared  with  the 
money  of  account,  promissory  notes,  and  bills  of  exchange, 
that  enter  into  the  transactions  of  trade,  besides  the  large 
proportion  of  barter  that  enters  into  the  trade  of  individuals 
as  it  constitutes  that  of  nations.  When  the  individual 
credit  diminishes  and  exchanges  are  smaller,  the  specie  is 
drawn  out  into  action,  and,  as  real  money,  takes  the  place, 
as  far  as  it  goes,  of  the  money  of  account,  supplying  the 
place  of  the  diminution.  This  it  goes  far  enough  to  do 
if  business  has  been  sound  and  credit  is  not  much  im- 
paired ;  but  if  it  has  been  speculative  and  enlarged  by 
banking  credits,  the  amount  of  specie  has  been  found  to 
be  insufficient  to  fill  the  vacuum  created  by  the  withdrawal 
of  a  large  amount  of  credit.  Under  these  circumstances 
an  amount  of  paper  money  to  act  in  conjunction  with  the 
specie  as  real  money  is  wanted  to  fill  up  the  vacuum. 
But  how  to  get  it  ?  Unfortunately  banks,  at  such  times, 
when  interest  is  high,  contract  instead  of  expanding  their 
issues ;  they  must  also  be  cautious,  then,  when  general 
credit  is  low,  how  they  expend  their  capital,  lest  they  be 
shipwrecked  !  Would  a  national  bank,  so  strong  as  to  be 
able  to  lend,  at  such  times,  on  property  security,  at  a  low 
rate  of  interest,  and  meet  the  exigencies  of  the  case,  be 
desirable  ?  This  country  will  never  invest  the  control  of 


FREE  BANKING.  121 

its  capital  in  the  State.  The  resource  seems  to  be  to 
keep  up  the  stringent  specie  checks  upon  expansions,  in 
the  hope  that  the  knowledge  of  how  small  is  the  volume  in 
existence  for  filling  a  vacuum  will  prevent  the  conduct 
that  leads  to  the  creation  of  a  great  one.  How  far  it  will 
do  so  is  to  be  estimated  from  what  has  been  previously 
stated  as  the  result  of  past  experience.  It  limits  the 
extent  of  the  vacuum,  though  it  will  not  set  aside  the 
causes  which  originally  operate  in  its  creation. 

But  the  present  mixed  currency  could  not  be  rapidly 
reduced  to  one  solely  of  specie  without  loss.  The  appre- 
ciation in  the  value  of  money  would  involve  the  stoppage 
of  industrial  enterprises  in  progress,  raise  the  cost  of  all 
production,  and  in  all  respects  operate  in  like  manner  as 
does  the  contraction  following  a  speculative  inflation, 
which  is  no  more  or  less  than  the  effect  of  an  appreciation 
of  money.  Depreciation  of  money,  on  the  other  hand, 
involves  a  loss  in  the  returns  coming  to  creditors  for  all 
debts  due  to  them,  also  in  all  coming  or  to  come  to  fund- 
holders  for  previous  investments,  to  all  dependent  upon 
fixed  incomes  and  not  upon  profits.  In  the  appreciation 
and  depreciation  of  money  lies  the  problem  of  the  cur- 
rency. Is  anything  left  for  us  to  do  but  this  ? — leaving 
existing  charters  alone  to  die  out  gradually,  to  allow  the 
standard  of  legal  tender  to  remain  as  it  is  in  gold  and 
silver,  and  permit  individual  credit  to  oscillate  about  that 
centre  under  the  influence  of  the  opposing  forces  of  con- 
fidence and  distrust  acting  between  individuals,  who  will 
be  abundantly  able  to  protect  themselves,  the  non-inter- 
ference of  legislation  not  guaranteeing  monopolies,  and 
permitting/ree  trade  in  banking. 

When  the  reduction,  supposing  it  to  be  made  had, 
6 


122  INDUSTRIAL  EXCHANGES. 

come  to  an  end,  and  no  money  existed  in  the  country  but 
gold  and  silver,  then,  if  all  credit  was  abolished  (the 
hypothesis  is  admissible),  and  the  value  of  all  property 
was  reduced  to  the  sum  of  specie,  appreciation  would  con- 
tinue. With  the  increase  of  property  by  production  the 
value  of  money  would  rise,  whilst  that  of  commodities  and 
property  would  cheapen.  There  would  not  necessarily 
be  any  check  to  production ;  the  money,  when  business 
required,  would  rapidly  change  hands,  and  would  tell 
largely  in  proportion  to  its  amount,  the  receipts  at  any 
given  time  of  the  same  amount  of  gold  or  silver  being 
equivalent  to  what  would  have  been  the  receipt  of  a 
greater  amount  antecedently,  and  it  purchasing  more 
commodities,  all  the  incentives  to  its  acquisition  would 
exist,  and  the  enlarged  return  to  it  ofcommodities  and  property 
would  furnish  means  for  renewed  increase  of  production. 
There  would  be  no  necessity  for  the  currency  to  expand 
with  the  increase  of  production  or  of  business.  Once 
settled  upon  the  basis  of  specie  with  no  expansive  currency 
nor  credit,  and  from  that  point  onward  the  appreciation  in 
the  value  of  the  currency  would  not  cause  any  losses  nor 
diminish  production.  Even  then,  credit,  so  far  as  indi- 
viduals chose  to  accord  it  to  each  other,  would  needs 
exist  to  oscillate  as  before  said,  and  we  arrive  again  at  the 
free  trade  conclusion  announced  at  the  close  of  the  last 
paragraph.  The  currency  being  of  specie,  and  assuming 
the  amount  of  paper  to  be  less  under  the  free  than  the 
monopoly  system,  prices  would  be  low,  and  gold  and  silver 
would  flow  into  the  country  from  all  others  with  which  it 
traded,  and  who  substituted  a  paper  currency  valuable 
only  at  home  for  one  of  specie. 

With  free  trade  in  banking  the  amount  of  paper  would 


FREE  BANKING.  123 

be  less,  inasmuch  as  in  the  absence  of  any  chartered 
guarantee,  individuals  being  watchful  to  protect  them- 
selves, their  doubts  would  come  into  play  where  evidence 
of  tangible  value  did  not  exist.  There  would  at  least  be 
no  charter  to  lull  their  watchfulness  into  security  under 
the  false  impression  that  the  State  was  taking  care  of  their 
interests  ;  and  that,  therefore,  the  institution's  promises 
must  be  good,  else  it  would  not  have  been  chartered  to 
make  the  money,  and  could  not  have  a  show  of  responsible 
names  figuring  at  the  tail  of  a  million  of  nominal  capital. 
Less  paper  would  be  circulated,  as  "  shinplasters"  would 
fall  into  general-  disrepute,  and  their  gradual  disappear- 
ance followed  by  a  circulation  entirely  of  specie, 
individual  credit,  then  as  now  furnishing  its  bills  of 
exchange,  &c.,  would  probably  be  the  result  of  free 
banking. 

The  recent  development  of  gold  in  California  furnishes  a 
prospect  for  the  supply  necessary  to  cover  the  subtraction 
from  circulation  of  much  of  the  paper  now  in  use  throughout 
the  United  States  ;  provided  the  establishment  of  a  mint  for 
drawing  the  metal  into  our  coinage  secures  the  gold  to 
the  home  circulation,  that  is  to  say,  so  far  as  the  existing 
custom  of  trade  regulating  the  quantum  of  circulating 
medium,  would  require  its  appropriation  to  domestic  use. 
If  paper  money  is  retained  as  such  quantum,  of  course  the 
gold  will  flow  out  to  distribute  itself  among  the  nations  of 
the  world.  Of  about  $200,000,000  currency  employed 
in  the  United  States,  probably  $125,000,000  is  composed 
of  paper,  and  $75,000,000  of  specie.  The  requisite 
supply  for  taking  the  place  of  the  paper  may  be  obtained 
from  present  appearances  during  the  next  decade,  and  its 
substitution  through  the  joint  action  of  coinage  by  our 


: 


124  INDUSTRIAL  EXCHANGES. 

mints,  and  the  extinguishment  of  paper,  is  desirable,  so  far 
at  least  as  the  expiration  of  bank  charters  and  the 
withholding  from  granting  new  ones  render  it  practicable. 
The  new-born  States  upon  the  Pacific  will  scarcely 
practise  the  gratuitous  folly  of  getting  up  a  paper  currency 
when  exporting  the  precious  metals. 

The  free  system  appears  to  be  the  only  alternative, 
unless  a  currency  be  adopted  that  shall  be  preferred, 
because  it  does  not  possess  the  fixed  character  of  gold,  the 
additions  to  which  in  long  terms  of  years  about  equal 
the  reduction  from  quantity  by  wear,  loss,  and  manu- 
factured consumption.  Such  a  currency,  sought  for  its 
singleness  of  quality,  the  relative  value,  must  not  be  based 
upon  specie,  lest  the  influx  and  efflux  of  the  basis  to  meet 
the  requirements  of  trade  in  adjusting  temporary  balances 
affect  its  security,  value,  and  action.  The  domestic 
money  would  need  to  be  severed  entirely  from  the 
exportable  commodity  of  money,  no  connexion  existing 
between  them,  and  the  principle  of  Lycurgus  put  in 
practice  which  prohibited  the  use  of  gold  and  silver  as 
money,  substituting  leather  and  iron,  which  had  no 
intrinsic  value,  compared  with  that  they  represented : 
a  principle  recognised  by  Plato,  who  would  have  the  coin 
of  "  value  among  the  members  of  the  state,  but  no  value 
to  the  rest  of  the  world."  The  quantity  must  needs  be 
immense,  as  a  grand  object  of  such  a  system  is  the 
mobilization  of  all  the  property  in  a  country  ;  it  would  be 
capable  of  extension  to  represent,  not  only  the  annual 
productions,  say  2000  millions  of  dollars  value ;  but 
also  the  fixed  capital  of  land,  dec.,  which  bears  a  value 
proportioned  to  the  production,  as  principal  does  to 
interest,  extending  the  valuation  to  not  less  than  ten  fold, 


FREE  BANKING.  125 

say  $20,000,000^00,  now  represented  by  one-hundredth 
part  that  sum. 

Not  possessing  the  specie  fixidity,  it  must  increase  in 
quantity  with  the  increase  of  production,  with  the  capital 
it  represents.  It  must  expand  with  the  dulness,  and  con- 
tract with  the  briskness  of  trade,  because,  when  business 
is  slow,  a  large  sum  of  money  represents  less  than  when 
it  changes  hands  frequently,  in  a  lively  traffic.  It  must 
also — paradoxically  with  the  necessity  for  increased  quan- 
tity keeping  pace  with  the  production  it  represents — ex- 
pand with  diminished,  and  contract  with  increased  supply 
of  commodities ;  for  this  currency  is  to  be  wealth  that  is 
expected  to  supply  the  shortcomings  of  real  wealth,  and 
keep  all  industrial  enterprises  of  production,  exchange,  and 
consumption  at  a  regular  pace,  drilled  by  the  strictest 
financial  tactics.  Unless  the  money  does  these  completely, 
there  is  no  gain  to  compensate  for  the  change  from  the  in- 
deciduous  and  fixed  character  of  specie,  to  and  from  which 
values  may  advance  and  recede,  as  supplies  of  commodi- 
ties increase  or  diminish,  and  which  always  possesses  a 
reliable  and  universally  acknowledged  value.  No  merely 
human  prescience  or  power  could  so  manage  a  paper  cur- 
rency that  it  should  exercise  the  necessary  elastic  functions 
at  all  times,  in  exact  pace  with  the  movements  of  supply, 
demand,  and  production.  If  such  currency  be  furnished 
by  a  number  of  chartered  producers,  it  must  be  remem- 
bered that  fraud  and  insecurity  have  heretofore  eluded  all 
efforts  to  bind  them.  If  it  be  supplied  by  the  government 
from  a  national  institution,  the  dangerous  power  placed  in 
the  hands  of  government  is  entirely  at  variance  with  re- 
publican principles,  which  would  leave  to  the  people  the 
control  of  the  elements  of  production  as  well  as  the  vital 


120  INDUSTRIAL  EXCHANGES. 

fluid  whose  circulation  keeps  these  elements  active.  Yet  by 
the  state  only  could  such  a  system  be  originated  and  con- 
trolled. 

Recurring  to  the  objection  that  free  trade  operates  in- 
juriously upon  the  currency,  it  has  probably  been  made 
sufficiently  clear  to  the  reader  who  has  traced  the  subject 
thus  far,  that  free  trade  is  international  in  its  effects  as 
well  as  national,  while  currency  is,  in  its  operations,  not 
exclusively  a  national  affair.  The  received  dogma  is  that 
the  foreign  trade  is,  to  a  certain  extent,  carried  on  inde- 
pendently of  the  internal  currency,  provided  there  be  a 
sufficiency  of  specie  always  in  the  country  to  meet  the  re- 
quirements of  trade  for  its  exportation  as  a  commodity,  to 
supply  the  deficiency  in  other  commodities.  The  cur- 
rency at  home  being  secure,  and  of  such  a  character  as  to 
involve  the  retention  of  a  sufficiency  of  the  representative 
of  value  universally  acknowledged  as  such  throughout  the 
world,  and  not  subject  to  the  enlarged  contractions  con- 
tingent upon  a  small  diminution  of  the  basis,  the  fluctuations 
of  trade  will  only  slightly  and  temporarily  derange  it. 

And  in  the  above  proviso  lies  the  difficulty.  Can  the 
currency  be  other  than  a  commodity  ?  When  the  powers 
of  nature  are  daily  developing  themselves  to  break  down 
the  barriers  between  nations,  and  the  restrictions  upon 
trade  are  dissolving  before  the  light  of  a  brightening  intel- 
ligence, as  the  sun  that  climbs  above  the  mountain  tops 
dissolves  the  fog  of  the  valley,  can  a  medium  of  circulation 
that  represents  commodities  in  one  country,  that  buys  and 
sells  at  home,  be  entirely  severed  from  connexion  with, 
be  distinct  in  character  from  that  which  will  as  a  commo- 
dity buy  and  sell  of  another  country  ?  These  requisites, 
can  they  be  dispensed  with  anywhere  save  in  Plato's 


CURRENCY  DERANGEMENT.  127 

model  republic,  or  More's  Utopia  ?  True,  I  have  said 
that  the  balance  of  trade  was  non  est,  and  that  the  traffic 
of  the  world  was  products  for  products,  not  a  buying  with 
and  selling  for  specie  ;  but  balances  are  speedily  adjusted 
by  the  equation  of  international  exchanges,  and  specie  is 
a  product ;  hence  the  propositions  do  not  conflict ;  nor  do 
the  conclusions. 

The  requisites  appear  to  be  embodied  in  specie  only, 
which,  distributed  by  the  movements  of  trade  throughout 
the  world,  accommodates  itself  to  the  natural  wants  of 
traffic,  as  if  it  were  purely  a  trade  of  barter.;  and,  as  the 
currency  permeates  all  the  avenues  of  the  social  system, 
and  is  the  medium  of  all  transactions,  small  and  great 
alike,  therefore,  the  internal  currency  is  so  far  allied  with 
the  external,  that  an  unity  of  character  appears  to  be 
requisite  in  order  to  prevent  derangement  of  its  action 
from  the  fluctuations  of  trade. 

Hence  we  understand,  that  if  the  currency  is  properly 
constituted,  the  fluctuations  of  international  exchanges 
will  prove  comparatively  innoxious  ;  and  that  free  trade 
could  co-operate  injuriously  with  the  currency  beyond  the 
first  effects,  which  would  be  limited,  only  when  the  latter 
was  in  fault,  a  condition  from  which  restricted  trade 
would  not  be  exempt.  So  far  from  being  exempt,  a  re- 
stricted trade  is  fraught  with  injurious  effects  whether 
the  currency  be  sound  or  expansive.  Currency  being  the 
same  under  both  the  regimes  of  free  trade  and  protection, 
the  fluctuations  will  be  most  frequent  and  injurious  under 
the  latter. 

Under  the  combined  action  of  a  high  tariff,  and  of  an 
expansive  paper  currency,  both  raising  the  prices  of  com- 


128  INDUSTRIAL  EXCHANGES. 

modities  in  the  country,  the  foreign  manufacturer  can 
profitably  bring  in  his  productions,  which  low  prices  here 
Would  have  kept  out.  Our  productions  being  high,  he 
will  not  take  them,  but  withdraws  the  specie  from  the 
country.  A  diminution  of  the  basis  of  the  paper  money 
causes  a  contraction  of  the  currency,  wa^es  fall,  and 
general  distress  prevails. 

High  tariffs  and  a  paper  currency  have  proved  to  be 
alike  anti-cheapening  processes. 

Effects  have  been  confusedly  charged  upon  free  trade, 
which  were  properly  attributable  to  enterprise,  accumula- 
tion of  capital,  and  an  unsound  currency  ;  and  this  allega- 
tion has  called  forth  what  has  here  been  advanced  upon 
the  theory  and  practice  of  currency. 

Restricted  importations  and  checked  exportations  cripple 
trade  and  reduce  nations  to  a  weakened  condition,  where 
they  are  sensitive  to  a  degree  that  excites  every  symptom 
to  a  crisis.  The  advocates  of  protection  favor  its  existence 
in  order  to  avoid  the  possible  contingency  of  a  currency 
derangement,  from  a  possible  excess  of  importations  over 
exportations.  At  least  with  a  sound  currency  and  free 
exchange  there  are  no  contractions  and  expansions,  as  a 
result  of  a  diminution  of  specie  in  a  country,  succeeding 
such  diminution,  and  creating  the  evil  supposed  to  be  the 
immediate  effect  of  the  diminution  of  specie. 

The  immediate  effects  of  the  rising  and  falling  in  the 
waves  of  trade  are  not  prolonged  with  additions,  as  by  an 
expansive  paper  currency.  These  risings  and  fallings  are 
of  themselves  but  as  the  first  ripples  that  immediately  sur- 
round the  spot  where  the  stone  is  cast  into  the  ocean  ;  but 
the  peculiar  nature  of  this  elastic  currency  carries  the 


CURRENCY  DERANGEMENT.  129 

movement  onward,  spreading  like  the  outermost  far  reach- 
ing circles  whose  effects  have  been  said  by  natural  philo- 
sophers to  extend  to  the  remotest  depths  and  the  most 
distant  margins  of  the  invaded  sea. 


L.I  B  K  A  !<  v 

UNI  V'KKS  ITV   OK 

r.VIJFORNIA. 


XIV. 

LABOR    AND    MATERIAL. 

FAILING  to  establish  other  objections,  Protection  seeks  to 
resolve  itself  into  this  theory.  That  all  commodities  are 
composed  of  labor  and  material,  and  in  an  article  received, 
if  labor  predominates,  material  must  be  small,  and  vice 
versa  :  That  the  larger  the  proportion  of  labor  to  material, 
the  more  profitable  the  exportation,  whilst  the  greater  the 
proportion  of  material  to  labor,  the  more  profitable  the 
importation.  That  wealth  being  the  result  of  labor,  it  is 
thence  the  interest  of  a  nation  to  export  of  those  com- 
modities which  are  manufactured,  and  of  small  bulk  in 
proportion  to  the  value,  and  import  those  which  are  the 
reverse,  containing  much  material.  They  would,  there- 
fore, place  a  high  duty  on  manufactured  articles,  and  a 
low  one  on  raw  material.  The  conclusion  to  be  drawn 
from  this  is,  that  if  a  nation  pursue  a  contrary  course  of 
policy,  it  will  soon  have  unemployed  population,  and 
become  poor  in  articles  for  consumption. 

This  is  certainly,  in  appearance,  very  alarming,  and, 

provided  the  theory  be  correct,  if  we  inhabitants  of  Young 

America  continue  to  send  to  England  and  France,  heavy 

.  bales  of  cotton  and  barrels  of  flour,  in  exchange  for  their 


LABOR  AND  MATERIAL.  131 

cloths,   silks,  and  cutlery,  we  must  soon  be  reduced  to 
starvation ! 

But  we  will  hope  that  the  theory  is  entirely  unfounded, 
and  a  protective  delusion.  I  do  not  believe  that  the 
difference,  as  here  assumed,  between  material  and  labor 
exists.  All  things  adapted  to  human  wants,  are  impreg- 
nated with  human  labor.  In  the  bale  of  cotton  of  500 
pounds  weight,  sent  to  France  in  exchange  for  a  pound  of 
lace,  few  would  probably  pretend  that  the  labor  expended 
upon  its  planting,  hoeing,  picking,  ginning,  and  com- 
pressing, was  less  than  that  expended  afterwards  in 
spinning,  weaving,  and  making  it  into  lace.  So  with 
other  articles  of  breadstufFs  and  tobacco ;  and  their  veiy 
bulk  involves  a  large  item  of  human  labor  in  handling  and 
transportation.  In  the  pound  of  lace,  an  amount  of  labor 
probably  not  less  great  was  expended  in  the  production, 
when  we  consider  the  shops,  fuel,  artisans,  their  feeding, 
clothing,  art-education,  &c. 

Commodities  are  not  exchanged  pound  for  pound,  but 
value  for  equal  value,  and  as  value  is  the  product  of  labor, 
there  must  be,  in  the  articles  exchanged,  an  equal  amount 
of  labor  invested.  If  the  labor  be  equal,  the  remainder  of 
material  must  be  equal,  each  to  each,  in  the  two  articles 
exchanged.  Of  a  whole  of  10  parts,  if  the  labor  in  the 
cotton  bale  be  6  parts,  and  in  the  cotton  lace  6  parts,  the 
balance  must  be  material,  and  be  4  parts  in  each. 

And  what  is  the  material  ?  The  gift  of  Providence  to 
the  soil  and  climate  of  the  country.  Now  apply  the 
touchstone  of  Free  Trade,  and  what  is  the  result  ?  That 
each  nation  gives  to  all  the  others  the  natural  gifts  placed 
at  its  disposition  ;  in  exchanging  gratuitously  their  natural 
products,  each  pays  for  nothing  but  the  labor.  If  there  is 


132  »  INDUSTRIAL   EXCHANGES. 

less  labor,  as  there  must  be,  when,  under  the  regime  of  free 
exchange,  all  production  finds  its  natural  bias,  there  will  be 
less  to  pay,  and  all  the  world  will  be  the  gainers,  and  be 
able  to  enjoy  of  all  things  a  greater  measure. 

Agricultural  production  is  capable  in  this  country  of  a 
wide  expansion  ;  and  the  labor  expended  upon  it  need  not 
be  less  diligent,  nor  less  fruitful  of  its  own  reward,  than 
that  employed  in  manufactures.  It  has  its  own  peculiar 
advantages  also.  The  same  principle  that  would  exclude 
the  importation  of  foreign  manufactures,  for  which  we  ex- 
change home  agricultural  products,  would,  if  extended,  for- 
bid exportation  of  the  agricultural  products.  Its  advocates 
might  say,  and  have  said,  that  such  prohibition  of  the 
exportation  of  home  produced  breadstufts  and  provisions, 
would  diminish  the  price,  and  make  these  prime  neces- 
saries plenty  at  home.  But  other  commodities  necessary 
to  consumption  would  rise  in  turn — one  set  of  values  going 
up,  and  another  going  down  ;  and  this  vicious  policy  would 
have  the  effect  of  discouraging  production,-  as  we  have  be- 
fore seen.  It  is  the  increase  of  production  we  require. 
Free  trade  firmly  opposes  all  those  absurd  and  suici- 
dal measures  that  would  diminish  quantity  and  promote 
scarcity. 

For  a  moment  suppose  that  an  exchange  of  much 
material  against  little  labor  could  be  made.  Man  labors 
for  the  result  of  production  in  order  to  consume,  and  not 
for  love  of  labor  in  the  abstract.  The  greater  the  result  in 
proportion  to  his  labor,  the  more  completely  his  require- 
ments are  met.  If  he  give  much  labor  in  exchange  for 
few  products,  it  would  seem  to  be  more  consistent  with  the 
loss  claimed  to  be  sustained,  than  when  little  labor  is 
given  in  exchange  for  a  large  product. 


XV 

COMMERCE. 

WHAT  docs  free  trade  effect  ?  It  opens  additional 
markets  for  the  disposition  of  the  produce  of  man's  labor. 
And  what  stimulant  to  man's  industry  is  more  powerful 
than  the  presentation  of  a  market  for  the  product  of  his 
industry  ?  Whatever  his  occupation,  his  energies  start 
into  effective  exertion  whenever  a  customer,  an  employer, 
a  client,  or  a  patient,  presents  himself  to  take  the  product 
of  his  labor  and  give  return  therefor. 

Furnish  a  market,  and  labor  and  capital  will  make  the 
earth  to  yield  up  her  riches ;  bring  forward  competition, 
and  what  she  yields  will  be  cheapened  and  the  quality 
improved.  All  this  is  simple  as  truth  ever  is,  and  would 
be  operating  always  for  the  benefit  of  humanity,  if  man 
did  not  attempt  and  succeed  but  too  well  in  governing  too 
much. 

To  supply  those  markets,  to  develope  herself  in  this 
medium  of  exchange,  is  the  part  of  commerce.  In  all 
ages  it  is  Commerce  who  has  gathered  into  her  embrace 
the  riches  of  the  world.  All  those  nations  who  have 
become  the  eminently  great  of  their  time,  otherwise  than 
by  barbarous  force  of  arms,  Tyre,  Sidon,  Corinth,  Carthage, 


134  INDUSTRIAL  EXCHANGES. 

Venice,  and  Great  Britain,  have  risen  upon  the  pinions  of 
the  white- winged  bark  of  trade. 

Trading  with  other  countries  under  the  system  of  free 
trade  that  exists  between  a  nation  and  its  colonies,  her 
commerce  enriched  Tyre,  the  great  city  of  the  Phoenicians, 
the  merchant  people  of  the  ancient  time.  In  the  language 
of  the  historian  Heeren,  "  the  ports  of  their  colonies  were 
open  to  them,  and  they  enjoyed  for  centuries  all  the  valu- 
able blessings  which  a  peaceable  and  undisturbed  com- 
merce  is  wont  to  bestow."  When  "  their  numerous 
fleets  were  scattered  over  the  Indian  and  Atlantic  Ocean, 
and  the  Tyrean  pennant  waved  at  the  same  time  on  the 
coasts  of  Britain  and  on  the  shores  of  Ceylon."  In  the 
words  of  the  inspired  Hebrew,  it  is  handed  down  to  us 
respecting  the  greatness  and  the  wealth  of  Tyre :  "  By 
thy  great  wisdom  and  by  thy  traffic,  hast  thou  increased 
thy  riches.  Thou  hast  been  in  Eden,  the  garden  of  God  ; 
every  precious  stone  was  thy  covering,  the  sardius,  topaz, 
and  the  diamond,  the  beryl,  the  onyx,  and  the  jasper,  the 

sapphire,  the  emerald,  and  the  carbuncle,  and  gold." 

Ezekiel  xxviii.  5,  13. 

By  making  themselves  merely  the  carriers  for  effecting 
exchanges  between  producing  countries,  nations  have 
become  eminently  great.  How  brilliant  the  prospects  of 
the  United  States  appear  when  we  reflect  that  she  not  only 
commands  a  great  and  growing  carrying  trade,  but  is  also 
the  producer  of  the  great  staples  for  the  markets  of  the 
world  !  "  Every  precious  stone"  will  yet  be  her  "  cover- 
ing."  And,  what  is  of  greater  value,  every  intellectual 
and  moral  blessing  will  be  the  light  of  her  candle.  May 
it  not  be  hidden  beneath  the  bushel  of  Restriction ! 

The   people  of  a  country  may  be  unconscious  of  the 


COMMERCE.  135 

existence  or  indifferent  to  the  development  of  their  capa- 
cities and  that  of  the  country,  when  the  opening  of  trade 
with  another  country  and  its  extension,  through  the  with- 
drawal of  restriction,  will  rouse  them  to  productive  action, 
that  gives  to  the  world  an  addition  of  wealth.  Doctor 
Franklin  relates  the  circumstance  of  an  importation  from 
Philadelphia  into  a  country  place  of  a  new  species  of  head- 
dress ;  that,  upon  its  appearance  one  Sunday  in  church, 
the  admiration  of  the  girls  was  so  excited  that  they  set  to 
work  knitting  stockings,  which  they  sent  to  Philadelphia 
for  sale,  and  thereby  supplied  themselves  with  the  desired 
article.  The  world  was  doubtless  the  gainer  to  the 
extent  of  those  stockings,  which  would  not  otherwise  have 
been  produced. 

Says  Mr.  Mill,  "  Much  as  the  collective  industry  of  the 
earth  is  likely  to  be  increased  in  efficiency  by  the  exten- 
sion of  science  and  of  the  industrial  arts,  a  still  more 
active  source  of  increased  cheapness  of  production  will  be 
found,  probably,  for  some  time  to  come,  in  the  gradually 
^unfolding  consequences  of  Free  Trade,  and  in  the  increas- 
ing scale  on  which  emigration  and  colonization  will  be 
carried  on." 

The  saving  to  consumers,  by  importing  what  could  be 
produced  cheaper  elsewhere,  is  the  gain  effected  by  com- 
merce. If  existing  protection  be  removed,  the  capital 
before  unprofitably  invested  in  hothouses  and  other  forcing 
apparatus,  will  be  withdrawn,  and  invested  in  shipping  and 
commerce.  It  then  induces  a  migration  of  labor  and 
capital  to  regions  adapted  to  the  production  of  varieties 
not  so  advantageously  produced  where  they  sojourned 
before. 

Commerce  and  its  effects  must  improve  the  physique  of 


136  INDUSTRIAL  EXCHANGES. 

the  globe,  drain  waste  lands  and  disease-engendering 
marshes,  and  reclaim  for  smiling  fields  and  health-breath- 
ing meadows,  whereon  to  produce  new  abundance,  vast 
regions,  before  exhaling  poisonous  miasmata.  Abundance 
will  thus  distribute  labor,  and  labor  distributed,  effects  ad- 
ditional conquests  of  antagonists,  creates  abundance  in  new 
directions,  and,  in  distributing  this  new  abundance,  im- 
proves anew  the  condition  of  mankind. 

Isolated  as  our  continent  is,  to  restrict  exchange  is  truly 
to  invade  the  sea,  for  it  is  the  domain  of  our  commerce. 
The  richly  freighted  vessel,  under  the  triumphant  reign 
of  protection,  would  be  swept,  as  by  a  tornado,  from  the 
surface  of  the  ocean  ;  and  sailless  masts,  rising  from  decay- 
ing hulks,  would  give  to  our  harbors  the  aspect  of  the 
scathed  forest  that  the  destroying  element  had  robbed  of 
all  its  green  and  vigorous  life.  Without  commerce, 
would  the  city  itself  have  existed  ?  Would  anything  be- 
yond a  small  town  have  stood  where  broad  avenues,  lined 
with  palatial  edifices,  are  annually  stretching  their 
lengthened  miles  deeper  into  the  recesses  of  once  primi- 
tive Manhattan  ? 

Commerce,  under  free  exchange,  is  to  humanity  what 
the  gospel,  with  its  ever-gushing  well-spring  of  eternal  life, 
is  to  the  dark  heathen  and  to  the  suffering  Christian.  One 
sheds  light  upon  and  enriches  the  material  existence,  as 
the  other  illumes  the  spiritual  life  of  man.  Cherish  Com- 
merce !  Art  and  Science  are  as  the  print  of  her  footsteps  ; 
and  civilization  as  the  breath  of  her  nostrils  ! 

Man,  if  left  to  himself,  is  prone  to  run  his  better  as  well 
as  his  worse  qualities,  into  excess,  that  converts  the  good 
into  faults,  not  less  injurious  than  those  that  were  originally 
evil.  The  comparison  of  opinions  and  customs,  and  of  the 


COMMERCE*  137 

results  of  experience,  with  those  of  others  placed  in  dif- 
ferent circumstances,  is  necessary  to  his  improvement. 
Every  nation  may  gain  something  in  point  of  arts,  cus- 
toms, morals,  or  characteristics,  from  others.  With  the 
more  intimate  knitting  of  commercial  relations,  political 
sympathies  will  be  diffused  to  strengthen  the  bonds  of 
amity  and  concord  ;  for  the  community  of  interest  which 
operates  under  the  regime  of  trade,  infuses  the  fraternal 
spirit  that  moral  influences  alone  would  not  suffice  to 
establish. 

It  is  asserted  by  protectionists,  that  foreign  pauper  labor 
is  overcrowding  the  labor  of  the  United  States,  and  that 
the  ignorance  of  those  uneducated  masses  is  likely  to  drag 
down  American  intelligence  to  its  own  level,  "  whole 
armies  of  vagabonds  and  felons  palsying  our  hands  and 
chaining  our  intellects."  Where  does  this  theory  lead 
to  ?  this  theory  that  renounces  the  common  sentiment  of 
humanity,  whilst  it  despairs  of  hope  in  our  institutions  and 
in  our  people  !  It  proclaims  that  evil  is  more  powerful 
than  good,  that  the  world  is  retrograding,  fast  travelling 
backward  on  the  way  to  barbarism  in  the  moral,  and  a 
desert  in  the  physical  organism.  Instead  of  retrograding, 
the  world  is  advancing.  The  immigration  to  this  country 
is  improving  the  race.  The  energy,  the  activity,  the 
physical  and  mental  power  of  the  people,  derive  new 
nourishment  from  the  amalgamation  of  those  varieties  of 
the  Caucasian  race  the  old  world  is  pouring  upon  our 
shores.  Under  the  dominion  of  universal  free  exchange, 
the  increase  of  an  -effective  population,  acquainted  with  the 
arts,  will  see  every  country  provided  with  railways,  and 
the  means  of  communication  multiplied  to  an  indefinite 
extent.  All  of  these  causes  and  their  effects  will  increase. 


138  INDUSTRIAL  EXCHANGES. 

Instead  of  being  confined  to  a  few  channels,  there  will  he 
a  thousand  streams  between  all  countries  composed  of  the 
races  crossing  each  other,  mingling  and  commingling  in 
commercial  intercourse,  to  the  constant  improvement,  phy- 
sical and  mental,  of  mankind. 

Have  we  looked  very  far  into  the  future  ?  We  have 
permitted  ourselves  to  idealize.  The  ultimate  of  every 
act  of  man  is  the  ideal.  From  the  smallest  to  the  great- 
est, the  ideal  is  the  object  sought ;  the  means  alone  are  of 
the  practical.  Whether  he  labors  to  acquire  material 
wealth,  or  seeks  alone  for  those  riches  that  "  neither  moth 
nor  rust  doth  corrupt,"  or  strives  after  the  "  bubble  repu- 
tation," the  goal  is  the  ideal.  Those  who  would  scorn  the 
ideal  that  enters  into  the  subject  under  treatment  of  the 
essayist,  would  prove  themselves  but  shallow  reasoners, 
who  reject,  or  see  but  half  the  object  brought  before 
them.  So  the  means  be  practicable,  it  need  not  damp  the 
zeal  of  any  lover  of  humanity,  if  there  be  an  ideal  at  the 
end  of  his  work. 

As,  under  all  the  varieties  of  development,  their  psychi- 
cal character  is  identical,  and  the  ethnological  facts  furnish 
testimony  for  the  reasonable  deduction  that,  under  those 
more  refined  influences  surrounding  the  superior  type  of 
the  elliptic  craniological  development,  the  inferior  gene- 
rally tend  more  or  less  towards  assumption  of  the  superior 
form,  it  is  no  impracticable  theory  that  free  exchange  will 
labor  in  commercial  intercourse  to  realize.  As  an  efficient 
agent,  its  effects  will  bear  upon  that  tendency  as  far  as  its 
realization  may  be  achieved  in  the  improvement  of  the 
races  ;  and  thus  by  means  of  commerce  will  be  promoted 
the  civilization  that  paves  the  way  for  and  co-operates  with 
Christianity  in  redeeming  mankind  from  whatever  of  the 


COMMERCE.  139 

brutal  clings  to  human  nature.  Individuals  are  distinct, 
but  humanity  is  one. 

The  restrictions,  all  the  artificial  impediments  interposed 
by  misgoverning  governments,  will  fail  to  interfere  perma- 
nently between  the  nations  at  a  time  when  immortal  mind 
is  bringing  forth  the  subtle  and  powerful  elements  that 
generate  in  nature's  laboratory  ;  and,  by  applying  them  to 
their  uses,  the  nations  are  being  brought  together  as  if  side 
by  side  ;  when  space  has  been  swept  away,  as  it  were, 
from  off  the  face  of  earth,  and  time  has  been  annihilated, 
as  though  to  teach  mankind  the  lesson  that  eternity  alone 
endures ! 

At  a  time  when  the  universe  and  its  great  mysteries  are 
becoming  easy  lessons  in  the  hand  of  science  ;  when, 
sitting  in  the  deep  recesses  of  his  study,  the  astronomer 
calculates  with  mathematical  correctness  the  causes  and 
effects  attaching  to  systems  of  created  worlds  ;  emerg- 
ing, he  waves  aloft  the  wand  of  science ;  and,  wizard- 
like,  proclaims  to  an  astonished  world  the  sublime  decree — 
at  yonder  point  in  space,  never  yet  seen  by  earthly  eyes, 
3,000,000,000  of  miles  distant,  to-day  a  globe  is  moving  in 
its  orbit ;  and,  as  though  called  into  being  by  his  mighty 
fiat,  lo,  it  is  !  He  has  declared  its  superficies  and  its 
weight,  the  length  of  its  years  and  its  days,  its  condition 
and  its  purposes  ;  and  behold  in  his  decrees  the  laws 
Omniscience  has  established  !  With  a  glance  he  spans  the 
roll  of  ages,  the  work  and  fate  of  worlds  !  He  backward 
casts  his  gaze,  and  declares  that  the  ray  of  light  now  shed 
upon  us  by  a  distant  planet,  though  travelling  with  the 
inconceivable  velocity  of  213,000  miles  in  a  second,  has 
been  journeying  on  its  way  60,000  years  ere  it  reached 
us  !  'Tis  thus  he  seems  to  take  the  measure  of  infinity. 


140  INDUSTRIAL  EXCHANGES. 

Such  are  the  facts  of  the  practical  that  guarantee  what- 
ever of  idealization  we  may  indulge  in. 

To  be  sufficient  unto  ourselves,  to  sow  for  the  uses  of 
manufacturing  operatives,  to  spin  for  the  uses  of  the  sow- 
ers, to  confine  ourselves  within  the  narrow  round  of  a  per- 
petually contracting  circle,  to  find  ourselves,  as  it  were, 
writhing  within  the  contracting  folds  of  the  huge  serpent, 
protection,  is  the  way  to  stifle  our  commerce,  and  foolishly 
cast  away  the  proffered  aid  of  this  wealth-dispensing  agent 
of  exchange. 

Facts  of  our  own  experience  have,  in  "  figures"  that 
"  never  lie,"  already  taught  whosoever  is  not  wilfully  ob- 
tuse, the  effect  of  free  trade  upon  commerce.  Official 
statistics  show  the  increase  of  tonnage  of  the  United  States, 
from  1842  to  1846,  a  period  of  high  tariff  dominion,  to 
have  been  5.61  per  cent,  per  annum  ;  and  that  from  1846 
to  1847,  one  year  of  reduced  tariff,  it  was  10.81  per  cent. ; 
and  from  1847  to  1848,  it  was  10.97  per  cent.  They  also 
show  that  the  imports  and  exports  for  the  fiscal  year  1846, 
that  is  to  say,  the  sum  total  of  our  foreign  exchanges,  was 
in  value  $235,179,613.  The  same  for  1847,  was  $305,- 
194,260.  Increase  $70,014,647.  The  increase  of  our 
population  is  3  per  cent,  per  annum.  We  find  the  tonnage 
to  have  increased  nearly  100  per  cent.,  and  the  exchanges 
of  commodities  with  foreign  countries  at  the  rate  of  30  per 
cent.  This  increase  of  97  per  cent,  of  shipping  trade  over 
and  above  the  regular  increase  of  this  trade  that  would 
grow  out  of  the  increase  of  population,  and  this  increase  of 
27  per  cent,  in  the  exchange  of  commodities  over  and  above 
the  increase  of  our  consuming  population,  are  principally 
attributable  to  the  enhanced  cheapness  of  the  commodities 
enabling  the  population  to  consume  greater  quantities. 


COMMERCE.  141 

This  cheapness  is,  in  this  instance,  an  effect  of  the  reduc- 
tion of  duties  which  took  place  at  the  beginning  of  the 
fiscal  year  1847,  and  marks  decisively  the  favorable  influ- 
ence of  free  trade  upon  a  country.  It  cannot  be  alleged 
that  it  is  the  effect  of  the  cheapening  agents  of  improved 
machinery,  &c.,  as,  if  so,  the  manufacturers  would  find 
these  agencies  sufficient  assistance  in  furthering  their 
measures  of  competition  against  foreign  production,  and 
surely  they  would  not  call  for  protective  tariffs  to  aid  them. 

There  was  no  increase  of  coastwise  tonnage  by  which  to 
prove  that,  while  our  foreign  exchanges  were  diminished 
under  high  tariffs,  the  domestic  were  increased  ;  but  on  the 
contrary  there  was  a  diminution,  which  proves  that  the 
domestic  trade  suffered  from  the  oppression  of  a  high  tariff 
as  well  as  the  foreign.  The  increase  of  coastwise  tonnage 
from  1842  to  1846  was  6. 45  per  cent,  per  annum,  and  from 
1846  to  1847,  it  was  13.15  per  cent.  Statistics  prove  that 
these  results  of  tonnage  and  exchanges  are  not  singular 
with  the  periods  named,  but  have  invariably  risen  and 
fallen  in  the  like  manner  with  the  several  cycles  of  high 
and  low  duties  that  have  prevailed  in  this  country.  The 
ship  building  was  larger  in  1847  than  in  any  previous 
year,  and  wages  rose  twenty  per  cent. 

It  is  repeatedly  urged  by  protectionists,  that  free  trade 
should  not  be  practised  by  the  U.  States  with  Great  Britain, 
because,  by  her  navigation  laws,  she  draws  to  herself  all 
the  carrying  trade,  and  the  effect  of  free  exchanges  is,  to 
build  up  her  shipping  and  destroy  ours.  The  experience 
of  the  past  two  years  has  established  the  reverse  of  this  to 
be  true.  Our  tonnage  has  increased,  as  stated,  and  Great 
Britain's  has  fallen  off.  In  1847,  her  total  tonnage  employed 


142  INDUSTRIAL    EXCHANGES. 

in  foreign  trade,  inward  and  outward,  was  7,100,786  tons. 
In  1848,  the  amount  was  6,675,381  tons. 

Under  the  freest  of  systems  that  could  be  practised, 
American  shipping  would  have  no  more  to  fear  than  many 
other  branches  of  American  industry.  The  Liverpool 
Times  notes  the  fact,  that  we  have  over  600  ships  engaged 
in  whaling,  while  England  has  but  17.  Under  the  opera- 
tion of  that  antidote  for  some  of  the  evils  wrought  by  high 
tariffs,  the  warehousing  system,  British  colonial  produce 
passes  through  our  territory  for  transhipment  from  our 
ports,  principally  in  American  vessels,  instead  of  taking 
British  shipping  from  Canadian  ports.  Whether  or  not 
this  fact  will  have  any  weight  in  hastening  an  alteration  or 
further  modification  of  England's  navigation  laws,  is  yet 
to  be  determined. 

However  it  may  be  alleged  that  peculiar  circumstances 
created  an  unusual  demand  for  our  products,  it  is  evident 
to  the  most  casual  observer,  that  under  a  high  restrictive 
regime  the  exchanges  for  1847  would  have  been  far  less  in 
amount.  But  the  allegation  falls  to  the  ground,  and  fails 
in  its  object  of  proving  that  famine  abroad,  and  not  the 
diminished  restriction  upon  international  exchanges,  caused 
the  increase  in  exportation  in  our  products,  when  the  com- 
parison is  extended  to  include  the  year  1848,  a  year  suc- 
ceeding a  large  crop  in  Great  Britain,  and  embracing  a 
period  to  which  could  not  possibly  attach  the  assumption 
of  the  famine  cause.  The  Treasury  report  shows  the  ex- 
ports of  our  products  during  the  first  two  years  of  the  low 
tariff  of  1846,  to  have  exceeded  those  of  the  two  preced- 
ing years  under  the  high  tariff  of  1842,  80,605,181  dollars. 

The  falsity  of  the  assumption  by  protectionists,  that  the 


COMMERCE.  143 

large  increase  of  our  exchanges  of  commodities  in  1847,' 
was  solely  the  effect  of  an  extraordinary  demand  for  our 
breadstuffs,  caused  by  the  famine  prevailing  that  year  in 
Ireland,  is  thus  exposed  by  the  report  of  the  Secretary  of 
the  Treasury  for  1847,  and  its  accompanying  tables. 

"  It  is  said  that  the  famine  in  Ireland  was  the  sole  cause 
of  our  late  large  export  of  breadstuffs  and  provisions. 
Now,  from  1790  the  values  are  not  given  so  as  to  be  stated 
in  amounts,  but  the  quantities  are  ;  and  these  prove  that, 
even  omitting  the  last  year  altogether,  and  comparing  the 
low  duty  periods  from  1790  to  1807,  and  from  1833  to 
1842,  with  the  years  of  protection  from  1817  to  1832,  and 
from  1842  to  1846,  the  average  export  of  breadstuffs  and 
provisions  was  much  larger  in  the  years  of  low  as  com- 
pared  with  high  duties,  especially  considering  the  differ- 
ence of  population." 

It  is  interesting  in  this  connexion,  to  glance  at  what 
would  be  the  effect  upon  the  commerce  of  this  country  if  it 
should  adopt  entire  free  trade,  reciprocated  by  all  the  world. 
This  cannot  be  better  done  than  by  quoting  from  the 
report.  "  We  see  then  here,  under  the  system  of  free 
trade  among  the  States  of  the  Union,  an  interchange  of 
products  of  the  annual  value  of  at  least  $500,000,000 
among  our  21  millions  of  people  ;  whilst  our  total  exchang- 
es, including  imports  and  exports,  with  all  the  world 
besides,  containing  a  population  of  a  thousand  millions, 
was  last  year  $305,194,260,  yet  the  exchanges  between 
our  States,  consisting  of  a  population  of  21  millions,  being 
of  the  yearly  value  of  $500,000,000  exchanged,  make 
such  exchange  in  our  own  country  equal  to  $23.81  per 
individual  annually  of  our  own  products,  and  reduce  the 
exchange  of  our  own  foreign  products  (our  imports  and 


INDUSTRIAL    EXCHANGES. 

exports),  considered  as  $300,000,000  with  all  the  rest  of 
the  world,  to  the  annual  value  of  thirty  cents  to  each 
individual.  That  is,  one  person  of  the  Union  receives 
and  exchanges  annually  of  our  own  products  as  much  as 
79  persons  of  other  countries." 

We  here  see  "  ample  room  and  verge  enough  "  for  an 
almost  infinite  expansion,  should  no  other  restrictions  exist, 
to  check  the  growth  of  mutual  exchange. 

When  transportation  is  the  only  antagonist  to  overcome, 
how  great  the  trade  compared  with  that  which  has  to 
combat  restriction  also  : — 

"  The  average  freight  from  the  Ohio  river  to  Baltimore 
is  greater  than  from  the  same  place  to  Liverpool ;  yet  the 
annual  exchanges  of  products  between  the  Ohio  and  Bal- 
timore exceed  by  many  millions  that  between  Baltimore 
and  Liverpool.  The  Canadas  and  adjacent  provinces 
upon  our  borders,  with  a  population  less  than  two  millions, 
exchange  imports  and  exports  with  us  less  in  amount  than 
the  State  of  Connecticut,  with  a  population  of  300,000  ; 
showing  that,  if  these  provinces  were  united  with  us  by 
free  trade,  our  annual  exchanges  with  them  would  rise  to 
$40,000,000.  It  is  riot  the  freight,  then,  that  creates  the 
chief  obstacle  to  interchanges  of  products  between  our- 
selves and  foreign  countries,  but  the  duties." 

It  is  the  mighty  gulf  which  protection  has  digged  broad 
and  deep  with  the  implements  of  wrong  between  a  market 
with  twenty-three  millions  of  customers,  and  one  that  is 
swarming  with  a  thousand  millions,  that  free  trade  would 
span  with  a  bridge  of  wealth  for  the  progressive  travel  of 
our  country. 


XVI. 

PROTECTION    NEUTRALIZES    GIFTS    OF 
PROVIDENCE. 

THAT  protection  neutralizes  the  benefits  that  might  be 
derived  from  a  country's  natural  advantages  may  be  seen 
by  the  following  illustration.  It  is  well  known  that  the 
United  States  abounds  in  fertile  sugar  lands.  The  sugar 
of  Cuba  comes  in  largely  to  compete  with  the  production 
from  these  lands.  Assume,  that  instead  of  seeking,  by 
improved  processes  and  economy,  to  maintain  a  successful 
competition,  our  sugar  makers  procure  the  imposition  of  a 
highly  protective  tariff.  It  results  that  for  a  short  time 
the  business  yields  large  profits.  But  with  profits  rises 
the  value  of  the  land  especially  adapted  to  sugar  making. 
The  enhanced  cost  of  this  natural  agent  of  production,  the 
rise  in  rent  where  hired,  or  the  rise  in  amount  of  interest 
where  it  is  owned  as  an  investment  of  capital,  reduces  the 
profit  yielded  by  the  sugar  ;  that  is,  the  rate  of  profit  on 
the  capital  (and  the  wages  of  labor,  if  it  be  free,  by  which 
means  capital  saves  itself  at  labor's  expense)  is  lowered. 
Then  the  sugar  producers,  instead  of  being  ready  to  dispense 
with  protection,  are  preparing  to  ask  for  more,  in  order  to 
effect  a  rise  in  the  price  of  sugar  equivalent  to  that  in  the 
value  of  land.  The  protection  accorded  to  them  has  thus 

7 


146  INDUSTRIAL    EXCHANGES. 

defeated  its  own  object,  and  neutralized  the  natural  ad- 
vantage of  land  specially  adapted  to  the  sugar  culture,  that 
had  originally  been  furnished  to  the  planter  gratuitously 
by  a  kind  providence.  The  sum  of  rise  in  value  of  the 
land  is  contributed  by  the  consumers  of  sugar,  who  are 
thus  far  losers,  whilst  the  sugar  producer  is  not  benefited 
by  their  contributions,  except  it  be  in  the  capacity  of  land 
monopolist. 

But  the  protectionist,  true  to  a  narrowed  instinct,  may 
say  that  protection  exists  and  cannot  be  removed ;  that 
these  improved  processes  are  not  already  in  possession  of 
the  sugar  maker;  and,  upon  protection  being  taken  off, 
foreign  sugar  would  pour  into  the  country,  and  he,  unable 
to  compete,  would  meantime  be  ruined,  and  his  property 
brought  to  the  hammer.  Nothing  so  shocking  would 
ensue  as  is  presented  to  us  by  the  pictures  opponents  of 
free  trade  conjure  up.  Free  trade  would  not  prove  to  be 
an  earthquake,  opening  wide  the  earth  to  swallow  up  land, 
houses,  and  all  possessions,  and  leave  the  quondam  pro- 
ducer a  ruined  wretch,  alone  in  all  the  world  upon  the 
brink  of  the  vast  chasm,  standing  in  unutterable  desola- 
tion and  despair,  to  mourn  an  irrecoverable  loss.  No,  the 
consuming  millions  are  around  him ;  land,  capital,  labor, 
all  exist  to  minister  with  profit  to  their  wants. 

The  propriety  of  removing  chronic  diseases  by  gradual 
processes  is  well  understood.  Gradual  reduction  is  a 
means  of  avoiding  reactions.  In  some  instances,  where 
extensive  establishments  and  the  habit  of  large  expendi- 
tures prevented  prompt  retrenching  to  a  safe  business,  the 
gradual  removal  of  protection  would  give  time  for  these 
improvements,  and  the  turning  of  capital  into  more  pro- 
e^  channels.  If  under  a  too  rapid  reduction  they 


PROTECTION  NEUTRALIZES  GIFTS  OF  PROVIDENCE.      147 

were  sold,  the  lands  would  be  purchased  at  reduced  rates, 
that  would  be  fixed  with  reference  to  the  amount  of  profit 
to  be  yielded  by  the  sugar  produced  from  them.  In  short, 
because  an  attempt  to  force  natural  laws  out  of  their 
proper  bias  operates  nationally,  as  it  does  internationally, 
under  our  hypothesis  a  depreciation  of  the  capital  in  lands 
would  ensue,  to  meet  the  smaller  profit  its  use  would  yield, 
and  it  would  fall  back  from  the  unnatural  height*  to 
which  it  had  been  forced  by  protection  to  its  original  true 
and  healthy  value.  We  are  probably  to  witness  this  pro- 
cess operating  with  the  property  of  the  English  landed 
aristocracy,  under  the  influence  of  the  corn  law  abolition. 

The  same  effect  is  produced  as  if  a  reduction  in  the 
hours  of  labor  were  to  diminish  the  planter's  profits,  from 
whence  a  like  depreciation  would  ensue.  The  reduction 
is  certain  to  produce  this  effect  with  free  labor  also,  unless 
the  pressure  of  growing  population,  ignorance,  and  protec- " 
tion  in-  its  several  forms,  are  in  force,  to  operate  against 
labor  and  filch  from  it  the  natural  reward.  In  both  cases, 
then,  of  reduced  protection  and  reduced  hours,  the  loss 
falls  upon  capital,  and  the  gain  accrues  to  the  benefit  of 
labor,  lightening  the  toil  of  the  slave,  and  raising  the 
remuneration  of  the  hired  laborer.  And  has  not  capital, 
so  long  protected,  had  long  enough  the  lion's  share  ?  And 
whence  should  be  drawn  the  supplies  to  fill  up  the  shallows 
of  unequal  distribution,  but  from  the  gorged  reservoirs 
protection  has  created  ? 

The  new  purchasers,  and  also  those  who  had  continued 
in  the  business,  do  an  uninflated,  healthy  business.  The 
former  proprietors  would  in  these  cases  of  retirement  from 
sugar  growing,  invest  their  reduced  capitals  in  other 
forms  ;  many  probably  seeking  the  cotton  culture,  the 


148  INDUSTRIAL   EXCHANGES. 

great  staple  of  the  world,  in  which  no  nation  will  ever 
compete  with  us  to  our  detriment.  Large  capitals  would 
be  cut  down,  and  a  greater  number  of  smaller  capitalists 
be  engaged  in  the  various  branches  of  industry.  The  effect 
is  an  equalization  of  fortunes,  more  consistent  certainly 
with  the  spirit  of  democratic  institutions,  than  the  gigantic 
monopolies  of  agricultural  and  manufacturing  interests 
that  protection  builds  up.  Admit  there  is  a  loss — one  suf- 
fered by  comparatively  a  few  individuals — but  there  are, 
also,  two  gains ;  the  immediate  gain  to  the  millions  of  con- 
sumers in  the  reduced  cost  to  them  of  sugar;  and  the 
ultimate  gain  in  the  cheapening  of  the  articles  effected 
by  the  cheapness  of  sugar.  Extend  the  application  to 
include  all  commodities,  and  these  effects  of  immediate 
and  ultimate  gain  will  be  estimated  by  hundreds  of 
millions.  This  is  not  the  question  of  a  class  we  would 
resolve,  but  a  problem  for  the  masses. 

We  have  had  some  experience  under  an  approximation 
to  free  trade.  It  shows  that  the  sugar  culture  is  one  of 
our  natural  industrial  adaptations,  and  would  not  be 
diminished  by  free  trade.  The  effect  of  a  recent  ap- 
proximation to  free  trade  upon  the  sugar  culture  is  thus 
explained  by  the  official  statistics.  In  1846,  the  last 
fiscal  year  of  the  high  tariff,  we  exported  of  brown  sugar, 
109,295  pounds.  In  1847,  the  first  fiscal  year  of  the  low 
tariff,  the  exportation  was  388,057  pounds.  St.  Croix 
furnishes  a  superior  quality  of  sugar,  Porto  Rico  one 
somewhat  inferior,  the  Southern  United  States  a  third, 
inferior  to  the  Porto  Rico.  These  various  qualities  all 
find  purchasers  and  consumers  in  our  own  and  other 
markets.  We  export  of  our  coarser  product  to  the  West 
Indies,  while  we  draw  thence  in  return  finer  qualities. 


PROTECTION  NEUTRALIZES  GIFTS  OF  PROVIDENCE.      149 

We  refine  coarser  sugars,  and  export  greatly  enlarged 
quantities. 

A  branch  of  agricultural  industry  is  beginning  to 
develope  itself  in  this  country,  which  promises  to  grow 
into  importance  and  value.  I  allude  to  the  grape  culture. 
It  appears,  by  reference  to  the  report  of  the  Patent  Office 
for  1847,  that  an  acre  of  land  in  a  certain  region  may 
yield  a  profit  of  six  thousand  dollars  upon  sale  of  the  wine 
produced.  Assuming  this  to  be  the  fact,  it  promises  well ; 
but,  supposing  that  attempts  be  made  to  monopolize  a 
natural  facility,  and,  by  protection,  to  force  it  into  an 
extensive  business,  under  the  usual  pretext  that  we  must 
protect  home  productions  against  invasion,  and  foster  each 
youthful  branch  of  industry  into  mature  strength,  lo !  it 
vanishes.  The  acre  that  will  now  yield  a  large  profit, 
protected  against  foreign  competition,  rises  to  a  correspond- 
ing value,  its  rent  goes  up ;  prices  of  the  wine  are  kept 
proportionably  high,  consumption  diminishes,  and  a  stinted 
growth  without  any  larger  profits  resulting  from  the  high 
prices,  is  the  fate  of  the  new  branch  of  agricultural  indus- 
try upon  which  large  anticipations  had  been  built. 

Unprotected,  the  competition  of  the  foreign  article 
brings  down  profits  to  a  healthy  level,  keeps  alive  the 
energies  of  those  engaged,  prevents  inordinate  rise  in  the 
value  of  the  land,  rendering  moderate  profits  ample  interest 
on  the  capital,  sufficient  to  pay  a  moderate  rent ;  and,  so 
far  as  this  branch  of  industry  is  to  be  really  profitably 
adapted  to  our  country  and  people,  admits  of  its  growth, 
and  no  further.  The  maturity  attained  is  the  healthy 
strength  of  the  child,  that  in  the  open  air,  and  in  rude 
contention  with  the  elements,  and  with  labor,  grows  into 
the  man  of  iron  muscle  and  of  mental  vigor,  whose  ener- 


150  INDUSTRIAL    EXCHANGES. 

gies  achieve  the  victories  of  a  freeman's  life.  Not  that 
maturity  so  immature,  which  so  often  yields  the  child  of 
ease  and  luxury  for  all  the  dainty  nursing  that  waited  on 
its  growth,  a  sad  return  of  softened  muscles,  and  the 
pitiable  effeminacy  that  live  alone  by  others'  help. 

Results  as  unprofitable  would  follow  upon  a  similar 
improvement  of  another  opportunity  which  offers  for  put- 
ting in  practice  the  protective  theory.  It  is  recorded  in 
the  New  York  Journal  of  Commerce,  that  recently  an 
importation  has  been  made  of  a  quantity  of  tea  plants,  for 
the  purpose  of  attempting  the  cultivation  of  tea  in  the 
Southern  States  of  the  Union.  Perhaps  there  is  no  one 
article  that  enters  more  largely  into  the  consumption  of 
the  people  of  this  country  than  tea,  and  in  accordance 
with  the  doctrines  of  protection,  its  cultivation  at  home 
would  be  a  desideratum  unsurpassed  by  any  other.  Tea 
is  now  free,  and  it  would  be  necessary  to  impose  a  revenue 
duty,  say  of  20,  and  an  addition  for  protection  of  at  least 
50  per  cent.  The  cost  of  tea  would  be  raised  to  consumers 
from  37J  and  50  cents  per  pound  to  one  dollar  and  up- 
wards ;  but  home  production,  furnishing  business  and 
fortunes  for  a  few  capitalists,  would  be  fostered.  The 
extensive  trade  with  China  that  takes  of  our  cottons,  lead, 
ginseng,  provisions,  candles,  &c.,  large  amounts  annually, 
would  be  destroyed,  and  the  production  of  these  articles 
diminish  in  a  ratio  with  the  increase  of  tea  growing. 
Peter  would  be  robbed  to  pay  Paul,  and  consumption  be 
robbed  for  the  purpose  of  waste  ;  but  still  protectionists,  in 
the  face  of  fact,  would  persist  that  home  production  was 
fostered  and  labor  was  encouraged.  The  commerce  and 
shipping  now  in  the  China  trade  would  receive  a  mortal 
wound,  and  ruin  be  widely  spread  among  those  extended 


PROTECTION  NEUTRALIZES  GIFTS  OF  PROVIDENCE.      151 

interests ;  but  home  labor  is  benefited,  repeat  the  protec- 
tionists, and  the  transportation  outward  of  our  cotton,  lead, 
&c.,  and  inward  of  the  tea,  would  be  saved.  .The  trades- 
men,  shippers,  and  sailors,  could  leave  their  productive 
operations  and  go  upon  the  tea  plantations.  True,  their 
labor  would  not  be  half  so  effective  as  before,  in  the  pro- 
portion of  result  to  effort ;  but  tea  would  be  protected. 

Under  free  trade  this,  as  well  as  other  nations,  will  enjoy 
and  profit  by  its  peculiar  advantages  ;  they  will  not  be 
neutralized.  Fears  have  been  expressed  of  danger  to  our 
cotton-producing  interests,  from  the  successful  appropria- 
tion by  England  of  her  East  Indian  possessions  to  the  pro- 
duction of  cotton  for  her  own  manufacturing  purposes. 
Protectionists  have  thence  reasoned,  that  we  need  a  home 
manufacturing  interest  sufficiently  large  to  work  up  all 
of  our  raw  cotton,  that  we  may  suffer  nothing  by  being 
shut  out  from  its  sale  in  the  English  market.  This  fear 
is  illusory.  Great  Britain  now  sends  five  million  pounds 
of  cotton  in  the  form  of  goods  to  that  quarter  more  than 
she  receives  thence.  I  last  year  was  shown,  in  the  Man- 
chester market,  a  specimen  of  the  best  article  of  Indian 
cotton  yet  furnished,  and,  after  a  careful  examination,  my 
own  conclusion,  drawn  from  a  six  years'  acquaintance  with 
the  production  of  cotton,  was  substantiated  by  that  of  two 
eminent  English  manufacturers,  one  of  them  a  member  of 
the  British  parliament.  It  was  evidently  inferior  in  qua- 
lity, particularly  in  point  of  staple,  to  the  American  ;  so 
much  so,  as  to  make  it  apparent  that  our  product  would 
always  occupy  a  position  far  in  advance  of  the  Indian  in 
the  world's  markets,  even  should  the  doubtful  experiment 
of  its  extensive  production  in  India  succeed  in  accordance 
with  the  expectation  of  the  most  sanguine.  For  all  the 


152  INDUSTRIAL   EXCHANGES. 

finer  manufactures  ours  would  be  preferred.  With  our 
improved  means  of  transportation,  we  possess  advantages 
which  we  must  hold  over  India ;  and  England  will  be 
sensible  of  the  good  policy  of  holding  to  that  American 
market  for  her  manufactures,  which  she  would  be  forced 
to  relinquish  to  a  great  extent  whenever  she  should  dis- 
continue taking  our  raw  cotton.  It  is  idle  to  fear  that  we 
can  ever  be  supplanted  in  the  production  of  the  great 
staple. 

It  is  melancholy  to  hear  those  economic  oracles  who, 
despising  the  gifts  of  a  bountiful  providence,  declare  in  a 
year  of  large  production  that  the  supply  of  the  necessaries 
of  life  must  be  checked,  in  order  that  prices  may  recover 
an  antecedent  higher  rate.  It  is  false  theory,  that  it  is 
necessary  to  check  production  in  order  to  find  markets. 
If  the  product  is  increased,  all  markets  being  open,  con- 
sumption will  increase  with  it,  because  the  purchasing 
power  will  increase  in  a  direct  ratio  with  the  production. 

In  order  to  build  up  their  manufacture  at  home,  for- 
merly the  importation  of  silks  was  prohibited  by  England. 
In  1825  Huskisson  got  the  prohibition  taken  off  from  fo- 
reign fabrics.  In  1832  the  manufacturers  demanded  an 
increase  of  duty  on  French  silks  ;  other  parties  called  for 
a  diminution.  The  latter  prevailed.  The  cry  of  ruin 
was  raised  by  manufacturers,  that  they  could  not  compete 
with  the  superior  and  cheaper  French  article.  They 
were  told  to  study,  to  revise  their  designs,  to  strive  in  all 
ways  to  improve  the  quality  of  their  fabrics.  They  did 
so.  What  is  the  result?  England  takes,  it  is  true, 
twenty  or  thirty  millions  value  in  francs  of  silks  from 
France,  but  she  also  exports  about  twenty  millions,  and 
France  herself  takes  of  English  silks. 


PROTECTION  NEUTRALIZES  GIFTS  OF  PROVIDENCE.      153 

The  truth  is,  that  in  the  various  countries  and  the 
several  sections  of  countries,  diverse  aptitudes  and  circum- 
stances of  the  people,  soil,  climate,  &c.,  fit  them  each  for 
the  production  of  some  of  the  many  kinds,  quantities,  and 
styles  of  wares  that  are  adapted  to  the  varied  necessities, 
tastes,  and  abilities  of  the  various  consuming  sections  of 
society.  This  great  diversity  in  the  industrial  population 
will  always  exist ;  some  being  more  skilful,  and  attaining 
greater  perfection  in  one  branch  than  another,  and  so 
around  the  circle  of  the  arts.  And  the  varieties  in  climate, 
and  soil,  and  facilities  for  production,  will  in  like  manner 
favor  the  prosecution  of  one  branch  of  industry  in  one,  and 
of  another  branch  in  some  other  country. 

"  The  superiority  of  the  woven  fabrics  of  Southern 
Europe  over  those  of  England,  in  the  richness  and  clear- 
ness of  many  of  their  colors,"  says  an  English  economist, 
"  is  ascribed  to  the  superior  quality  of  the  atmosphere,  for 
which  neither  the  knowledge  of  chemists,  nor  the  skill  of 
dyers,  has  been  able  to  provide,  in  our  hazy  and  damp 
climate,  a  complete  equivalent."  And  so  it  is  around  the 
circle  of  production,  throughout  the  globe.  In  some 
regions,  men  require  less  aliment  than  in  others,  and  pro- 
duction is  thereby  sustained  at  less  cost.  Under  the  incite- 
ment of  the  markets  supplied  by  free  exchange,  each  will 
be  active  in  finding  its  own  peculiar  aptitudes,  and  will 
excel  in  those. 

Providence  has  thus  created  the  various  facilities  of 
time,  place,  aptitude,  &c.,  in  production,  to  match  the 
same  variety  in  consumption.  If  left  to  their  own  natural 
sagacity,  each  will  find  his  vis  a  vis,  to  their  own  mutual 
advantage.  These  aptitudes,  adaptations,  and  facilities, 
are  all  equally  valuable  gifts  of  Providence,  with  the  im- 

7* 


154  INDUSTRIAL    EXCHANGES. 

provements  in  the  useful  arts.  The  citizens  of  New  York 
would  not  now  scorn  the  use  of  the  steamer  that  floats 
them  up  to  A.lbany  in  9  hours,  and  revert  to  the  Dutch 
sloop  that,  under  favorable  circumstances,  formerly  made 
the  voyage  in  9  days.  In  1824  or  '25,  it  was  proposed  to 
construct  the  Liverpool  and  Manchester  railway,  that 
should  convey  passengers  at  the  rate  of  eight  miles  an 
hour.  A  tempest  of  opposition  was  aroused,  got  up  on 
all  sides  by  canal  owners,  towns  that  supposed  their  exist- 
ence depended  on  the  patronage  of  stage-coaching,  inn- 
keepers, coach  owners,  carriers,  and  fox  hunters.  It  was 
declared  that  the  country  would  be  deserted  by  all  but 
radicals,  engineers,  and  manufacturers.  The  road  was 
completed  in  1830,  and  instead  of  eight  miles,  the  speed 
was  twenty.  But  no  destruction  followed.  Money  was 
plentiful,  interest  low ;  and  before  1835,  nearly  a  dozen 
other  lines  of  railways  had  sprung  into  existence.  Some 
20  years  since,  when  it  was  proposed  to  establish  a  printing 
press  in  Madrid,  for  multiplying,  at  a  cheapened  rate, 
copies  of  music,  the  copyists,  whose  business  it  was  to 
write  the  sheets,  raised  so  great  an  uproar,  that  govern- 
ment abandoned  the  project.  Even  Spain  would  not 
hearken  to  that  complaint  of  a  contracted  monopoly  at  this 
day  ;  and  at  some  future  day  she  will  mount  another  step 
on  the  ladder  of  improvement,  and  adopt  free  trade. 

Perhaps  certain  of  those  English  silk  manufacturers 
were  ruined  ;  also,  those  North  River  sloop  owners, 
captains,  and  sailors ;  yes,  even  before  this,  those  Spanish 
copyists  may  have  been  crushed  beneath  the  tread  of  Pro- 
gressive Improvement ;  but,  if  so,  each  and  all  of  them 
have  since  risen  from  the  earth,  with  new  strength,  sown 
with  the  blow  that  momentarily  prostrated  them,  where- 


PROTECTION  NEUTRALIZES  GIFTS  OF  PROVIDENCE.      155 

with  they  have  wrought  with  fourfold  power  and  effect,  for 
their  own  and  the  general  gain.  They  have  not  suffered 
irretrievably,  for  the  improvements  in  machinery  are 
gradual  in  their  introduction,  and  effect  the  changes  of 
increased  production,  and  the  casting  out  of  employment, 
in  a  gradation  of  ratio,  that  brings  about,  through  increased 
cheapness  augmenting  consumption,  the  end  of  increased 
demand  for  labor,  without  the  serious  injury  being  felt  by 
those  copyists,  &c.,  of  being  entirely  and  suddenly  thrown 
out  of  employment.  The  increased  productions  soon  swell 
into  a  sum  beyond  the  amount  of  fixed  capital  invested  in 
the  machinery,  and  create  a  circulating  capital,  that 
employs  a  progressively  increasing  amount  of  labor  in 
production.  The  machinery  is  then  seen  to  be  operating 
in  increasing  capital  to  induce  production,  as  we  have 
seen  free  importations  do  it. 


XVII. 

RECIPROCITY. 

MANY  who  admit  the  truth  of  the  free  trade  principle 
doubt  the  expediency  of  adopting  its  practice  without  re- 
ciprocal action  on  the  part  of  other  nations.  The  objec- 
tions to  free  trade  lie  against  the  influx  of  foreign  pro- 
ducts ;  our  democracy  permits  the  influx  and  attainment 
to  citizenship  of  foreign  population.  In  all  the  kindred 
movements  should  this  country  have  awaited  the  action  of 
others  ?  The  fathers  of  the  revolution  should  not — aside 
from  the  resistance  to  oppression — surely  have  deferred 
the  establishment  of  the  democracy,  and  awaited  the  simul- 
taneous action  of  other  nations,  through  fear  of  their  popu- 
lation flowing  in  upon  us,  and  assuming  a  portion  of  the 
administration  of  the  government. 

If  all  wait  for  others  to  take  the  initiatory,  free  exchange 
will  never  begin.  Should  we  wait  for  other  nations  to 
abolish  protective  duties  before  we  do  so  ?  Suppose  the 
United  States  can  raise  corn  so  readily  as  to  be  able  to 
afford  it  in  the  markets  of  Great  Britain,  our  best  custo- 
mer, for  50  cents  a  bushel,  the  annual  exportation  amount- 
ing to  20,000,000  bushels.  Also,  that  England  can 
manufacture  cloth  for  50  cents  a  yard,  of  which  we  im- 
port 20,000,000  yards.  We  will  impose  no  protective, 


RECIPROCITY.  157 

but  only  a  revenue  duty  of  10  per  cent.  The  20,000,000 
yards  are  then  imported,  at  a  cost  to  our  consumers  of 
$11,000,000.  Great  Britain,  however,  imposes  a  duty  of 
20  per  cent.,  10  of  it  being  protective.  The  20,000,000 
bushels  of  breadstuff's  will  cost  the  English  consumers 
$12,000,000.  We  are  then  the  gainers  over  them  by 
one  million  dollars,  not  a  few  manufacturers — but  the  mass 
of  our  consumers. 

Is  it  objected  that,  no  competition  being  maintained 
against  them  here  by  the  protection  of  a  tariff,  the  English 
manufacturers  will  charge  their  own  high  prices  for  the 
cloths  ?  This  will  rectify  itself  by  the  operation  of  the 
simplest  law  of  trade — demand  regulates  supply,  capital 
existing  to  produce  ;  competition  regulates  prices.  Good 
prices  procured  thereupon,  our  demands  will  create 
enough  competition  to  reduce  prices  to  living  profits  ;  and 
the  rate  of  these  profits  will  be  still  further  reduced,  by 
the  increased  cheapness  of  living  there  effected  by  the 
abundance  of  corn  sent.  Food  enters  into  the  cost  of  pro- 
duction of  all  commodities — and  it  is,  of  all  things,  most 
essential,  that  food  be  abundant  and  cheap  in  a  country,  as 
then  all  its  own  productions  of  other  kinds,  and  all  the  im- 
ports in  exchange  for  its  products,  will  be  cheapened. 

Will  the  protectionists  say  that  Great  Britain,  keeping  the 
protective  duty  on  our  corn,  thus  raising  its  cost  and  that 
of  living,  cannot  afford  us  the  cloth  as  cheaply  as  if  she 
imposed  no  protective  duty,  and  we  are  then  paying  a  high 
price  for  her  commodity,  whilst  receiving  only  a  low  one 
for  our  own  ?  This  is  at  once  an  admission  of  the  free 
trade  doctrine,  that  protection  enhances  the  cost  of  all 
things  to  consumers,  and  produces  a  loss.  Great  Britain, 
by  imposing  a  protective  duty,  increases  the  cost  of  food 


158  INDUSTRIAL   EXCHANGES. 

and  clothing  to  her  own  people,  and  the  same  to  us,  the  loss 
to  herself  being  much  greater  than  ours.  An  evil  exists, 
and  it  is  created  by  protection.  Would  it  improve  mat- 
ters  to  extend  that  evil  by  our  adopting  protection  also  ? 
It  would  sound  extremely  illogical  to  say  yes ;  and 
it  would  be  a  false  reply  as  well.  Yet  this  is  the  exact 
position  in  which  those  place  themselves  who  call  for 
protection,  that  we  may  not  pay  tribute  to  foreign  na- 
tions, giving  them  high  prices  for  what  we  might  pro- 
duce at  home  with  protection.  Who  pays  the  high  prices  ? 
The  consuming  masses.  The  only  object  sought  is  to  di- 
vert their  payment  from  the  English  to  the  American 
manufacturer.  Here  lies  the  deplorable  error,  in  looking 
ever  after  the  interest  of  producers,  instead  of  consumers. 
The  prices  are  not  to  be  lowered.  That  is  not  by  any 
means  the  intention. 

To  show  the  process  by  which  matters  would  be  made 
worse  by  our  adoption  of  protection  as  a  retaliatory  mea- 
sure, suppose  we  impose  a  protective  duty  of  10  per  cent, 
on  the  cloths.  The  20,000,000  yards  used  by  the  families 
of  laborers,  farmers,  mechanics,  &c.,  then  cost  $12,000,000 
instead  of  $11,000,000.  This  is  the  immediate  loss.  The 
$1,000,000  protective  duty,  with  the  rise  in  price  of  all 
the  home  manufactured  and  consumed  of  the  cloths  added, 
amounting  probably  to  tenfold,  has  gone  into  the  pockets  of 
some  few  hundred,  or  mayhap  few  score,  manufacturing 
capitalists.  That  they  employ  labor  to  make  the  cloths  is 
no  argument  in  favor  of  the  system,  because  these  laborers 
amount  in  all  to  only  a  few  thousands,  and  without  the  pro- 
tected cloth  manufacture  they  would  find  employment  in 
other  pursuits. 

The  expenses  of  living  being  increased  to  consumers 


RECIPROCITY*  159 

here,  they  must  have  higher  prices  for  their  several  pro- 
ducts, their  quotas  of  labor.  The  corn  we  send  to  England 
for  the  cloths  is  higher,  and  costing  them  more,  their  ex* 
penses  of  living  are  increased,  and  the  cloths  they  make 
cost  more  to  manufacture.  We  then  have  to  pay  more  in 
turn  for  those  cloths  than  we  did  before.  Each  consumer 
here  pays  another  advance  on  the  cloth  he  consumes* 
This  is  the  ultimate  loss.  The  duty  imposed  on  their 
cloths  has  reacted  upon  us,  and  for  one  gain  going  into  the 
pockets  of  a  few  our  millions  suffer  two  losses. 

Thus  is  illustrated  the  theory  of  consumption,  a  science 
which  is  too  little  studied,  and  should  be  regarded  with 
that  rtverence  borne  towards  the  sacred  and  inalienable 
rights  of  man,  as  represented  by  the  eternally-worshipped 
justice. 

The  effects  of  production  determine  ultimately  upon  the 
consumer. 

Under  the  opposite  process  of  reduction  extending  to  all 
commodities,  leaving  them  free  to  enter,  Would  ^  those  na- 
tions of  whom  we  took  them  not  receive  ours  in  exchange  ? 
They  could  not  avoid  it,  inasmuch  as  the  discontinuance  or 
refusal  to  do  so  would  necessarily  involve  a  cessation  of 
their  sales  to  us ;  and  thus  the  protectionist's  aim  would  be 
attained — we  would  be  forced  into  home  production  for  our 
consumption.  And  would  we  not  produce  the  wherewithal 
to  exchange  for  the  enlarged  quantity  of  their  commodities 
consumed  by  us  ?  We  could  not  fail  to  do  so,  inasmuch 
as  consumption  is  the  procreating  principle  of  production. 

We  may  now  observe  some  of  the  visible  effects  of  free 
trade  independent  of  reciprocity. 

Our  tariff  of  1846  created  comparative  free  trade,  that 
is,  it  largely  diminished  protection,  when  it  reduced  the 


160  INDUSTRIAL   EXCHANGES. 

duty  on  woollen  cloths  to  three-fourths  of  what  it  had  been 
under  the  previous  tariff  of  1842 ;  on  sugar  to  less  than 
one-half;  and  on  cotton  manufactures  to  one-third.  There 
was  a  loud  cry  of  ruin  from  these  and  other  interests, 
that  rang  dolefully  through  the  land.  These  prophecies 
have  not  been  realized.  So  with  other  interests  thus 
affected  by  the  tariff  of  1846.  A  further  reduction  would 
raise  the  same  cry,  and  with  the  same  result  of  non-reali- 
zation. In  some  cases  there  was  reciprocity  on  the  part  of 
the  countries,  but  in  other  cases  there  was  not,  as  in  sugars, 
any  reciprocal  action  on  the  part  of  the  nation  exchanging 
products  with  us ;  and  yet  those  sugar  and  other  producing 
interests  are  still  flourishing. 

That  these  statements  of  protectionists  are,  many  of 
them,  eminently  false,  and  sometimes  uttered  from  purely 
selfish  motives,  is  evident  from  the  fact  that  since  1846  a 
town  built  with  manufacturing  capital,  devoted  to  manu- 
facturing purposes,  and  filled  with  a  manufacturing  popu- 
lation, has  risen  up  in  Massachusetts,  and  grown  into 
importance.  Another  similar  city  is  growing  up  on  the 
Connecticut  River,  with  capital  engaged,  and  water  power 
being  developed  for  sixty  first  class  factories,  to  support  a 
population  of  100,000.  A  thousand  laborers  are  employed 
in  constructing  gigantic  works,  and  making  hills  of  solid 
rock  to  disappear  as  by  magic.  This  is  the  ruin  caused  by 
abolishing  a  portion  of  the  protective  imports  existing  three 
years  since. 

In  Switzerland,  Tuscany,  and  the  Hanse  towns,  where 
free  trade  exists,  there  is  exhibited  a  remarkable  contrast 
between  the  laboring  population,  and  that  of  those  countries 
where  it  does  not  exist. 

Degraded,  yet  still  beautiful  Spain,  what  would  not  free 


RECIPROCITY.  161 

institutions,  with  free  trade,  do  for  her  ?  What  has  prohibi- 
tion done  for  her  while  it  has  been  exacted  to  the  death, 
and  the  exportation  of  specie  has  been  forbidden  by  a 
Draconian  code  ?  Where  are  her  manufactures  ?  They 
began  to  fall  with  the  commencement  of  their  protection 
under  the  tyrant  Philip  II.,  and  now,  alas  !  But,  even  in 
Spain  may  be  found  evidence  of  the  beneficial  effects  of 
free  trade  where  reciprocity  was  not  established. 

In  the  Basque  provinces,  where  commerce,  until  recently, 
was  free,  there  is  a  profitable  production  of  iron,  grains, 
&c.,  and  a  degree  of  prosperity  that  contrasts  favorably 
with  the  misery  of  Old  Castile,  where  the  protective  system 
holds  sway.  Also,  in  Estremadura,  under  the  same 
sway,  the  poverty  and  misery  are  deplorable. 

Much  complaint  has  been  made  by  protectionists,  at  the 
policy  of  the  United  States  admitting  Cuba  coffee  free, 
and  their  sugars,  &c.,  at  low  duties,  whilst  it  does  not 
reciprocate,  and  even  prohibits  some  of  our  staple  products. 
If  they  look  at  the  condition  of  Spain  they  will  see  a 
melancholy  picture  of  the  deplorable  effects  of  a  stringent 
protective  policy.  As  to  Cuba,  it  is,  1  believe,  the  univer- 
sal sentiment,  that  her  admission  into  the  Union,  and 
adoption  of  our  free  policy,  would  raise  that  lovely  island 
to  a  pitch  of  prosperity  she  is  yet  far  from  reaching. 

If  Cuba  charges  ten  dollars  duty  per  barrel  upon  our 
flour,  bringing  the  cost  of  the  necessary  article  for  the 
sustenance  of  her  people  up  to  triple  or  quadruple,  what  it 
costs  our  consumers,  who  but  Cuba  is  the  principal  loser  ? 
What  is  Cuba  ?  Is  she  not  the  food  eating  and  apparel 
wearing  inhabitants  of  the  island  ?  It  is  time  it  was 
everywhere  understood  that  a  country  is  composed  of  the 
consuming  population  thereof,  and  is  not  a  myth,  an  ideal 


162  INDUSTRIAL    EXCHANGES. 

something  to  labor  for,  and  starve  for,  while  human  beings 
are  writhing  in  the  grasp  of  want. 

In  France  are  two  departments,  of  the  North  and  of  the 
Gironde.  The  products  of  the  latter,  of  which  wine  is  the 
principal,  are  not  protected  ;  so  far  from  it,  that  foreign 
duties  and  internal  octroi  bear  heavily  upon  their  exporta- 
tion from  the  locality  of  manufacture.  The  department  of 
the  North  is  webbed  with  roads,  railways,  and  canals,  and 
its  products,  cloths,  fabrics,  oleaginous  seeds,  castings,  &c., 
enjoy  an  exorbitant  protection.  If  the  doctrine  of  protec- 
tionists is  true,  the  people  of  the  North  should  be  happy, 
whilst  in  the  Gironde  they  should  be  in  a  miserable 
condition.  It  is  the  reverse;  at  Lille,  of  70,000  inhabit- 
ants, 22,000  indigent  paupers  were  succored  ;  in  the 
department  of  the  North  163,000  out  of  960,000  inhabit- 
ants are  in  the  same  situation.  Nothing  of  this  exists  in 
the  Gironde  ;  and  in  place  of  one-fifth  of  the  population,  as 
at  the  North,  and  one-third  as  at  Lille,  one  twentieth  at 
the  most  have  recourse  to  public  charity.  The  evidence 
of  a  commission  despatched  a  few  years  since,  thus  repre- 
sents the  condition  of  the  laborers  of  Lille.  "  It  is 
impossible  to  imagine  the  appearance  of  the  habitations  of 
the  poor  we  have  visited.  Their  improvident,  careless 
manner  of  living,  draws  upon  them  evils  which  render 
their  misery  frightful,  intolerable,  murderous.  Their 
poverty  becomes  fatal  by  the  abandonment  and  demoraliza- 
tion it  produces In  their  obscure  caves,  in  their 

chambers  which  one  would  take  for  caves,  the  air  is 
never  renewed,  and  becomes  infectious  ;  the  walls  are 
plastered  with  filth  of  a  thousand  kinds.  If  a  bed  exists, 
it  is  a  plank  covered  with  dirt  and  grease,  humid  and 
putrescent  straw,  and  with  a  cloth,  the  texture  and  color  of 


RECIPROCITY.  163 

which  are  hidden  under  layers  of  dirt,  and  so  ragged  as  to 
make  such  a  cover  as  would  a  sieve.  The  furniture  is 
broken,  worm-eaten,  and  filthy.  The  utensils  are  thrown 
without  order  about  the  habitation.  The  windows,  always 
closed,  are  filled  with  paper  and  glass,  but  so  black,  so 
smeared,  that  the  light  cannot  enter.  There  are  proprie- 
tors who  fasten  the  shutters  so  that  the  tenants  may  not 
break  the  glass  in  opening  and  shutting.  The  floors  are 
covered  with  cinders,  filth,  rotten  straw,  debris  of  vegeta- 
bles brought  in  from  the  street,  with  holes  for  animals  of 
all  kinds.  With  the  foul  odors  of  men,  beasts,  filth,  &c., 
the  air  is  not  respirable.  And  the  poor  man  himself,  his 
clothes  are  rags,  and  his  hair  does  not  know  the  comb. 
His  skin  can  be  seen  upon  his  face,  but  upon  his  body  it  is 
hidden  by  the  insensible  deposits  of  divers  exudations. 
Nothing  can  be  more  filthy  than  the  condition  of  these 
poor  demoralized  creatures.  As  to  their  children,  they 
are  discolored,  lean,  puny,  old,  yes,  old  and  wrinkled  ; 
their  stomachs  swollen,  and  their  limbs  emaciated,  with 
crooked  spines  and  bowed  legs ;  fingers  ulcerated,  and 
bones  puffed  and  soft  ;  in  fine,  these  little  unfortunates  are 
tormented  and  devoured  by  insects." 

The  Gironde  is  agricultural ;  the  North,  manufacturing ; 
yet  it  is  said  by  the  opponents  of  free  trade  in  the  United 
States  that  "  the  morals  and  intelligence  of  the  artisan 
class  are  in  advance  of  the  agricultural,"  and  hence  it 
is  in  effect  argued  that  the  standard  of  American  intelli- 
gence must  be  raised  by  effecting  a  transfer  of  labor  from 
the  agricultural  to  the  manufacturing  department  of 
industry  ! 

At  the  close  of  the  war,  in  1814,  the  Swiss,  shut  up  in 
the  heart  of  Europe,  walled  in  by  the  protective  policy  of 


164  INDUSTRIAL   EXCHANGES. 

surrounding  nations,  opened  their  frontiers  to  all  the 
products  of  Europe.  Consequently,  placed  in  an  unfa- 
vorable condition,  and  with  no  contingent  of  an  improved 
shipping  trade  to  grow  out  of  it,  as  with  other  nations, 
they  have  largely  developed  within  themselves  the  indus- 
trial pursuits  which  have  been  cultivated  with  the  aid  of 
protection  by  the  t\vo  great  nations  of  Europe.  This  has 
been  the  effect  of  admitting  free  of  all  duty  those  articles 
necessary  to  their  consumption.  Their  workmen  have 
found  more  steady  employment  than  those  of  protected 
rivals,  and  there  has  been  none  of  the  loss  from  unoccupied 
time. 

A  writer  upon  the  subject,  in  this  country,  whose  pro- 
duction occupies  a  prominent  place  in  the  literature  of  our 
legislation,  thus  expressed  himself  in  1845.  "  What 
would  become  of  England,  if,  now  that  by  the  loss  of  ten 
days'  food,  perturbation  is  seen  throughout  her  social 
order,  she  were  by  a  free  importation  of  grain  to  debase 
her  agriculture  fifty  per  cent.  ?  Why,  she  would  be 
transferring  the  power  of  feeding  her  own  people  to  the 
Crimea,  to  the  United  States,  or  any  other  large  grain 
country  !"  Doubtless  the  reader  will  smile  with  me  as 
he  reads  this  protective  fulmination,  prophetic  of  the  dread 
results  of  free  trade.  He  will  recall  the  fact  of  the  actual 
repeal  of  England's  corn  laws  the  very  next  year,  and 
trace  the  effects  up  to  this  day.  Two  short  years  only 
have  elapsed,  and  the  effects  of  the  awful  "  transferring 
the  power  of  feeding  her  own  people ,"  have  told  weightily 
into  the  treasuries  of  both  countries,  and  made  the  big 
heart  of  humanity  to  beat  with  a  throb  whose  sound  has 
swept  the  broad  Atlantic  like  a  mighty  paean,  and  soared 
to  heaven  in  a  Te  Deum  of  joy  ! 


XVIII. 

COST  OF  PROTECTION— WAR— VIOLATED 
LAWS— DESTRUCTION. 

THE  enhanced  prices  on  16  articles,  of  $331,000,000 
value,  paid  by  consumers  to  the  protected  classes  in  1845, 
as  appears  by  the  Treasury  Report  of  July,  1846,  was 
$94,000,000.  Add  to  this  for  increased  consumption  the 
proportion  of  excess  of  consumed  imports  in  1848,  which 
were  $134,000,000,  over  those  of  1845,  which  were 
$102,000,000,  and  the  amount  that  would  have  been  paid 
for  protection  on  these  articles,  in  1848,  by  consumers  in 
the  United  States,  may  be  stated  at  $123,000,000.  How 
much  the  tariff  of  1846  has  diminished  this  sum  cannot  be 
stated,  perhaps  to  half  the  amount ;  and  it  is  not  probable 
the  amount  paid  is  less  than  that  sum,  when  we  add  to  the 
sixteen  included  in  the  above  estimate  all  those  other  arti- 
cles which  are  more  or  less  protected. 

The  abstraction  from  the  consumer's  pockets  is  effected 
in  this  manner.  The  protected  articles  can  be  produced 
abroad  for  certain  prices,  just  as  far  below  what  they  can 
be  here  as  the  amount  of  protective  duty.  They  sell  in 
our  markets  at  the  high  prices  made  up  of  the  foreign 
value  and  the  duty.  These  importations  and  sales  amount 
to  several  millions  upon  which  the  duty  is  collected.  But 


166  INDUSTRIAL    EXCHANGES. 

the  consumption  is  much  more ;  it  includes  with  the  im- 
ported articles  all  those  produced  here  and  not  exported, 
double,  treble,  and  quadruple  the  amount  of  the  importa- 
tions. The  price  of  those  produced  here  being  raised  by 
the  producers  to  a  level  with  what  the  foreign  articles  bear 
with  duty  added,  consumers  pay  the 'per  cent,  of  protective 
duty  on  all  consumed. 

In  the  same  report  the  amount  of  annual  products  is 
estimated,  with  great  show  of  truth,  confirmed  by  statisti- 
cal tables  of  returns  from  several  of  the  states,  at  2,000,- 
000,000  dollars  value.  The  protected  portion  of  these  is 
stated  to  be  $500,000,000.  The  annual  home  production 
of  such  articles  being  by  estimate  500  millions,  and  the 
importations  being  134  millions,  the  quantity  consumed  is 
634  millions.  The  duty  of  30  millions  collected  raises 
the  134  millions  24  per  cent.  Estimating  10  of  the  24 
per  cent,  to  be  protective  raises  the  price  of  the  entire 
consumption  the  same  rate,  and  consumers  pay  $63,400,000 
to  the  producers  of  the  dutiable  articles.  In  this  estimate 
is  omitted  the  ultimate  loss  from  checked  importation,  the 
effect  of  partial  prohibition. 

If  all  the  worst  and  most  dismal  alarm  cries  uttered, 
whenever  a  reduction  of  the  tariff  is  threatened,  by  those 
interested  in  keeping  up  protection,  were  to  be  realized  in 
consequence  of  a  reduction  taking  off  all  protection,  the 
people  might  pay  the  entire  losses  of  all  concerned,  and 
still  be  largely  the  gainers  by  the  operation.  Truly  pro- 
tection is  an  expensive  pet  to  foster,  and  were  it  productive 
of  none  of  the  evil  which  the  previous  pages  of  this  work 
have  proved  against  it,  but,  on  the  contrary,  were  it  the 
agent  for  all  the  good  protectionists  claim  for  it,  would  it 
not  still  be  a  question  if  our  hard-handed  republicans  were 


COST  OF  PROTECTION.  167 

not  violating  the  maxim  of  the  sage  Franklin,  and  paying 
"  too  dear  for  the  whistle  ?" 

The  sum  exacted  by  protection  from  consumption  is, 
though  disguised,  nevertheless  paid  to  the  full.  Whoever 
is  passing  along  our  great  mart  of  fashion,  and  Rialto  of 
retail  trade,  Broadway,  may  frequently  observe,  conspi- 
cuously arranged  within  the  immense  plate  glass  windows 
of  the  shops,  articles  ticketed  as  great  bargains  in  this 
wise — "  only  !|Q.  "  At  first  the  passer  by  fancies  he  sees 
a  great  bargain  offered  in  the  great  one,  not  observing  the 
little  nine  ingeniously  added  ;  and,  not  until  he  purchases 
and  receives  the  change  from  a  bill  tendered  in  payment, 
is  the  fact  revealed,  that  22  cents  instead  of  12£,  has 
brought  the  commodity  to  the  purchaser  at  anything  but 
a  bargain.  I  have  sometimes  thought  I  saw  here  the 
great  1  put  forward  by  protectionists,  as  the  great  bless- 
ing to  national  industry,  while  the  little  crooked  9,  lurking 
behind,  seemed  to  be  the  personification  of  that  protection 
which,  under  the  shadow  of  the  great  1,  is  filched  from  the 
pockets  of  the  unsuspecting  purchasing  consumers. 

Well  meaning  persons  sometimes  urge  as  a  reason  for 
protection,  that,  enabling  a  country  to  supply  all  the 
demands  for  home  consumption,  it  would,  in  the  event  of 
war,  diminish  the  evils  that,  under  opposite  circumstances 
of  procuring  supplies  of  certain  articles  from  abroad,  would 
be  effected  by  a  cessation  of  peaceful  intercourse.  The 
national  honor  and  dignity  require,  they  say,  that  we  should 
be  sufficient  unto  ourselves. 

A  blind  policy  that,  for  what  would  be  at  best  a  doubt- 
ful good,  sacrifices  a  substantial  benefit ;  a  policy  by  which 
we  would  deny  ourselves  the  benefits  of  participation  in  all 
the  distinct,  local,  and  valuable  natural  advantages  that  are 


168  INDUSTRIAL    EXCHANGES. 

peculiar  to  each  different  region  of  the  globe,  enjoyed  by 
us  through  the  long  terms  of  peace,  by  means  of  mutual 
exchange  of  these  goods.  Deny  ourselves  these,  that  we 
might  war  more  readily.  Acting  upon  the  principle  that 
war  is  to  come — war  the  rule,  peace  the  exception.  Placing 
ourselves  in  non-intercourse,  in  a  self-reliant,  and  defiant 
position  ;  declaring  our  expectation  of,  and  readiness  for 
war ;  cultivating  the  jealousies  and  the  antagonistic  feel- 
ings that  naturally  must  develope  themselves  under  such 
circumstances.  Is  this  Christianity  ?  is  it  civilization  ? 
is  it,  this  system  at  once  absurd  and  barbarous,  true  politi- 
cal economy  ?  Is  this  the  policy  that  should  characterize 
the  age  we  live  in,  and  the  principles  that  should  govern 
this  nation,  the  Republic  of  the  19th  century,  and  par 
excellence,  the  humanity  ameliorating  exemplar  of  the 
world  ?  Is  it  not  rather  a  sacrifice  of  national  indepen- 
dence and  dignity  ?  Rather  let  us  cherish  the  principles 
of  free  trade,  whose  tendency  is  to  promote  intercourse,  to 
cause  each  nation  to  feel  how  necessary  the  benefits  that 
can  be  conferred  by  the  others  are  to  its  happiness,  to 
its  advancement,  that  shall  cause  each  people  to  benefit 
morally  by  the  enlightenment  of  the  other. 

Is  each  man,  each  family  sufficient  of  itself,  independent 
of  others  ?  Did  nature  intend  this  ?  The  shoemaker  needs 
the  hatter — the  tailor  the  weaver,  &c. 

It  is  soon  enough  to  put  the  protective  policy  into 
operation  when  war  comes.  It  has  been  an  effect  of  the 
necessities  created  by  war,  not  of  the  sober  judgment  that 
dictates  the  policy  of  peace.  During  the  war  of  1812-15, 
the  wants  of  government  forced  up  the  United  States  tariff 
to  a  rate  so  high  that  various  producing  interests  sprang 
into  a  precocious  existence,  which,  upon  the  return  of 


WAR.  169 

peace,  required,  asked,  and  obtained  a  protection  that 
enabled  them  to  sustain  themselves  during  the  long  period 
of  34  years  of  peace  that  has  followed.  A  period  when  no 
belligerent  obstacle  has  interposed  to  prevent  the  purchase 
by  consumers,  from  foreign  producers,  of  all  those  produc- 
tions at  a  much  lower  rate  than  the  protection-created 
prices  that  have  prevailed  for  the  greater  portion  of  the 
time. 

Now,  as  we  have  seen  that  with  the  continuance  of  pro- 
tection, the  necessity  for  its  support  is,  as  a  general  rule, 
becoming  more  and  more  felt ;  and  that  the  absence  of 
the  assistance  afforded  by  protection  is  the  best  guarantee 
for  the  healthy  growth  of  those  branches  of  production  in- 
digenous to  the  country,  it  is  apparent  that  the  imposition, 
besides  being  laid  on  antecedently,  must  be  imposed  not 
only  during  the  war,  but  for  an  indefinite  period  after  its 
termination.  Evidently  it  is  a  poor  preparation  for  war, 
to  commence  levying  the  war  tax  for  an  indefinite  term  of 
years  previous  to  the  commencement  of  hostilities.  A 
tax  that,  under  the  tariff  system  of  taxation,  no  amount  of 
previously  sustained  home  producing  industry  will  super- 
sede the  necessity  for  imposing  when  war  comes.  Me- 
thinks  it  were  wiser  policy  to  prepare  for  war  by  amassing 
a  store  of  wealth  from  the  anticipated  enemies  for  some 
time  previous  to  the  war,  by  means  of  a  profitable  com- 
merce and  exchange  of  products;  and,  when  war* is  de- 
clared, to  impose  the  tax — not  sooner.  "  In  time  of  peace, 
prepare  for  war,"  by  such  a  policy  as  will  have  the  three- 
fold effect  of  rendering  war  least  likely  to  occur,  acquiring 
the  "  sinews,"  and  at  the  same  time,  through  extension  of 
commercial  relations,  strengthening  the  maritime  power, 
that  if  war  should  come,  it  may  be  met  with  fair  assurance  of 
8 


170  INDUSTRIAL   EXCHANGES. 

success.  It  must  be  other  preparation  than  that  which 
cramps  the  resources  of  the  country,  wastes  labor,  and 
weakens  the  power  of  consumption  and  protection.  It  is 
said  of  the  French  Admiral  Duperre,  that,  when  he  was 
asked  to  increase  the  National  marine,  he  answered: 
"  Apply  to  my  colleague,  the  minister  of  Commerce  ;  it 
comes  within  his  jurisdiction." 

Free  exchange  is  the  pacific  strife  in  which  all  men  will 
contend  for  the  benefit  of  society,  contributing  each  their 
quota,  and  forced  by  competition  to  be  equally  vigilant, 
skilful,  and  progressive. 

Protection  induces  the  violation  of  law  and  engenders  im- 
morality. Whoever  has  travelled  in  Europe  must  have  felt 
that  custom-houses  encircle  a  country  with  a  girdle  of  vices. 
In  England,  where  the  duty  laid  on  tobacco  is  enormous,  it 
was  proved  before  a  committee,  that  there  are  schools  in 
London,  managed  by  women,  where  is  taught  the  most 
skilful  manner  of  smuggling  tobacco.  Before  the  same 
committee  it  was  also  proved,  that  in  three  years  there  had 
been  1500  individuals  punished  for  smuggling  that  article. 

Indian  handkerchiefs  were  formerly  prohibited  by  the 
English  tariff.  Joseph  Hume  once  in  the  House  of  Com- 
mons, called  upon  each  member  to  draw  his  handkerchief 
from  his  pocket — and  every  honorable  member  drew  forth 
an  Indian  handkerchief.  The  prohibition  is  now  abolished. 
The  higher  the  duties,  the  more  they  are  defrauded.  In 
Spain,  regular  contralando  establishments  are  organized  for 
the  business  of  smuggling.  There  are  those  that  deliver 
10,000  dollars  worth  of  merchandise  at  a  time,  imported  in 
every  conceivable  manner.  The  contrabandista  makes  his 
occupation  a  science,  an  art,  a  profession,  practised  on  a 
grand  scale,  and  occupying  all  ages  and  sexes.  It  be- 


VIOLATED  LAWS.  171 

comes  a  widely  practised  profession  to  teach  violation  of 
the  laws. 

Protection  destroys  what  free  trade  would  save.  In  Eng- 
land, large  quantities  of  merchandise  have  been  annually 
thrown  into  the  Thames,  in  consequence  of  being  prohi- 
bited from  importation,  and  of  the  heavy  duty  weighing 
upon  them.  One  million  pounds,  in  round  numbers,  of 
foreign  butter  are  said  to  have  been  destroyed,  because 
the  duty  precluded  its  entrance  into  the  country.  Is  this 
law  justifiable,  is  it  right,  this  law  that  causes  destruction, 
nay  requires  it  ?  As  well  might  we  justify  a  law  that 
would  authorize  the  incendiary  to  apply  the  torch  to  a 
neighbor's  dwelling,  and  wantonly  destroy  his  property. 

I  have  seen  the  vandalism  practised  by  English  cus- 
toms' officers  destroying,  in  obedience  to  law,  such  im- 
ported books  as  were  reprints  of  British  works.  It  is  na- 
tural that  ignorance  and  depravity  should  abound  where 
such  acts  are  legally  sanctioned,  in  order  that  a  produc- 
tion of  literature  may  be  maintained  at  a  high  price,  that 
keeps  it  out  of  the  reach  of  all  but  the  few ;  prohibiting 
the  introduction  and  distribution  among  the  people  of  the 
cheaper  editions  of  intellectual  aliment,  from  out  of  the 
consumption  of  which  they  would  in  turn  become  produ- 
cers of  the  mind's  food — a  production  more  likely  to  be 
varied  and  valuable  because  of  the  greater  number  and 
variety  of  educated  intellects  brought  to  the  work. 

It  has  been  estimated  at  what  an  enormous  cost  protec- 
tion is  sustained  in  this  country,  even  under  the  compara- 
tively free  trade  tariff  of  1846.  After  deducting  from  the 
amount  annually  paid  by  the  people,  the  revenue  that  goes 
into  the  federal  treasury,  a  sum  is  left  that  would  enable 
the  government  to  pay  the  wages  at  one  dollar  per  day  of 


172  INDUSTRIAL   EXCHANGES. 

200,000  workmen,  supposing  so  many  were  thrown  out 
of  employment  by  the  abolition  of  protection.  Sup- 
pose that  government  were  to  employ  these  workmen, 
instead  of  supporting  them  in  idleness.  Their  labor  would 
build  yearly  a  large  and  handsome  city,  capable  of  containing 
a  population  of  50,000  people.  Is  it  not  a  destructive  sys- 
tem that  in  effect  destroys  such  a  city  per  annum,  the  loss 
devolving  upon  the  consuming  masses  ?  Protection  destroys 
secretly,  incendiarism  openly.  If  the  effects  of  the  protec- 
tion exhibited  themselves  in  the  glare  of  the  terrible  de- 
struction that  marks  the  progress  of  the  conflagration, 
would  it  be  submitted  to  ? 

The  Dutch  East  India  Company  formerly,  having  a 
monopoly  of  the  Spice  Islands,  in  order  to  keep  up  the  de- 
mand at  high  prices,  used  to  limit  the  supply.  But  how  ? 
Not  literally,  as  protection  limits  supply  of  certain  commo- 
dities in  many  countries,  by  imposing  a  prohibitory  duty 
— the  circumstances  of  the  case  prevented  that  form  of 
keeping  up  demand  and  value  by  limiting  supply ;  they 
accomplished  the  same  end  by  destroying  a  portion  of  the 
crop  whenever  a  good  season  increased  the  quantity  be- 
yond what  the  world  would  consume  at  their  high  prices. 

In  both  cases  an  artificial  value  above  what  would  have 
been  the  natural  is  created  ;  the  value  of  the  commodities 
exchanged  for  those  artificially  raised  being  depressed 
in  a  ratio  with  the  rise,  to  the  loss  of  all  furnishing  those 
commodities  so  exchanged  and  depressed. 

There  are  various  forms  of  protection,  but  there  is  none 
the  less  a  wilful  casting  away  of  gifts  bestowed  by  a  boun- 
tiful providence.  Whether  it  be  by  murder  in  the  first 
degree,  or  by  manslaughter,  a  life  is  neverthelessj  sa- 
crificed. 


AU  V 


•-. 


XIX. 

DEMOCRACY. 

BROAD  as  the  entire  universe,  high  as  man's  loftiest 
aspiration,  deep  as  the  profoundest  mystery  of  nature's 
arcana,  democracy  is  not  an  affair  of  mere  partisanship — 
"  No  pent  up  Utica  confines  its  powers."  Democracy  is 
universalization ;  democracy  is  progress,  is  CHRISTIANITY. 

The  social  element  is  entering  as  it  never  has  done 
before  into  all  the  theories  and  practices  of  man.  Political 
science  is  more  deeply  imbued  with  it ;  in  the  recesses  of 
men's  hearts  political  measures  are  canvassed  with  refer- 
ence to  their  social  influences ;  they  are  being  regarded 
less  as  questions  of  party  or  expediency,  of  dollars  and 
cents,  than  as  affairs  of  socially  democratic  tendencies. 
Old  systems  of  feudality  and  restriction  are  being  changed 
for  new,  feature  by  feature. 

Whatever  has  a  tendency  to  encourage  a  class  at  the 
expense  of  the  people  at  large,  is  well  known  to  be  at 
variance  with  the  spirit  of  democratic  institutions.  In  the 
science  of  political  government,  this  country  has  put  in 
practice  what  we  believe  to  be  the  ne  plus  ultra  of  govern- 
mental formula — democracy.  It  is  consistent  for  it  to  adopt, 
in  the  economic  science  of  industry,  the  formula  of  con- 
sumption. The  principle  of  "  the  greatest  good  to  the 


174  SOCIAL  REMEDIES. 

greatest  number"  prevails  here  in  the  universal  suffrage, 
freedom  of  conscience,  and  other  features  of  our  demo- 
cratic institutions.  To  extend  the  principle,  so  acknow- 
ledged to  be  just,  is,  in  securing  the  interest  of  consumers, 
to  substitute  for  the  aristocracy  of  production  the  democracy 
of  consumption.  It  is  cheapness  the  people  require,  it  is 
cheapness  humanity  demands. 

The  principle  which  has  taken  firm  root,  and  is  spread- 
ing itself,  even  to  teaching  the  world  that  the  dispensation 
of  political  rights  among  the  whole  people  is  more  just, 
than  confining  them  absolutely  to  a  few,  is  going  further, 
and  convincing  the  world  that  those  industrial  regulations 
cherishing  a  limited  number  of  producers  at  the  expense 
of  the  masses  of  consumers,  are  likewise  unjust  and  untrue. 
Political  economy  is  being  democratized  with  the  other 
sciences.  Since  the  adoption  of  the  free  trade  principle, 
to  the  extent  of  abolishing  the  corn  laws  in  England,  we 
see  it  is  the  people  who  have  been  benefited.  It  is  not  the 
nobility  who  have  eaten  all  the  provisions. 

The  law  of  Providence  has  made  the  strong  and  the 
weak,  the  young  and  the  old,  the  rich  and  the  poor ;  has 
spread  over  the  globe  a  variety,  giving  to  each  region  its 
peculiar  advantage.  All  evidently  for  the  purpose  of 
effecting  exchange,  intercommunication,  and  by  a  simple 
law  accomplishing  this  for  a  wise  purpose,  for  the  benefits 
to  grow  out  of  the  intercourse,  the  equalization  that  follows 
upon  the  mutual  dependence,  as  it  exists  individually  in 
society  between  the  several  trades  and  professions.  Free 
international  intercourse  will  level  the  aristocracy  of 
nations,  as  the  press,  steam,  and  other  facilities  are 
levelling  that  of  classes.  The  towering  height  upon 
which  the  nobility  sat  in  august  dignity?  dispensing  grace 


DEMOCRACY.  175 

and  patronage  to  the  peasantry  of  the  fields  below  them, 
began  to  totter  when  the  railway  first  gave  laborers  power 
to  change  from  place  to  place,  and  shift  employers  at  will, 
and  when  the  press  placed  newspapers  in  the  hands  of  all 
men. 

England  has  been  often  referred  to  as  an  evidence  of 
the  prosperity  effected  by  the  protective  system ;  but  these 
fail  to  glance  at  the  reverse  of  the  medal,  where  the  horri- 
ble suffering,  pauperism,  and  misery  show  at  what  a  cost 
this  partial  prosperity  has  been  purchased.  There,  where 
under  an  undue  appropriation  of  the  natural  agent  of  pro- 
duction,  the  division  of  labor's  product  is  unjust,  immense 
fortunes  rise  up  in  the  midst  of  great  destitution.  The 
pi  under  of  her  own  people  is  a  kindred  source  of  wealth  to 
that  derived  by  nations  from  foreign  conquest,  and  the 
rapine  of  war.  To  her  may  be  applied  the  language  of 
Macpherson,  used  with  reference  to  the  Romans  :  "  Their 
luxuries  cannot  be  considered  as  the  summit  of  a  general 
scale  of  prosperity  ;  it  was  a  scale  graduated  but  by  one 
division,  which  separated  immense  wealth  and  power  from 
abject  slavery,  wretchedness,  and  want."  Statistics  have 
shown  us  what  has  there  been  gained  for  labor  by  protec- 
tion, and  particularly  in  the  acquisition  of  articles  of  neces- 
sity. Prices  have  risen,  whilst  the  people's  wages  have 
diminished.  This  state  of  things  untaxed  exchanges  will 
go  far  to  terminate  in  England,  and  would  have  already, 
if  that  country  had  not  merited  the  accusation  of  manufac- 
turing the  doctrines  of  free  trade,  like  other  products,  for 
exportation,  without  applying  them  at  home.  Unfortu- 
nately for  them,  her  productions  and  her  doctrines  have 
been  alike  withheld  from  the  common  use  of  her  oppressed 
people. 


176  SOCIAL  REMEDIES. 

How  will  free  trade  specially  operate  to  reduce  the 
landed  aristocracy  to  a  level  with  other  interests  in 
England  ?  The  land  proprietors  produce  the  grain,  which 
now  sells,  after  several  short  and  one  good  harvest,  and 
under  a  duty,  at  high  prices.  The  taxes  and  charges 
upon  their  estates  and  means  of  production,  are  equal  to 
nearly  a  moiety  of  these  prices.  Free  trade  in  corn  is 
about  to  pour  breadstuffs  into  the  country,  at  a  rate  that 
only  requires  the  collateral  aid  of  plentiful  harvests  there, 
to  reduce  prices  to  a  figure  that  will  not  stand  so  much 
above  the  amount  of  taxes  and  charges  as  to  cover  their 
expenses,  except  upon  a  diminished  scale,  much  below  the 
extravagant  expenditures  it  has  been  their  wont  to  indulge 
in.  Then  the  proud  castles  must  topple  upon  their  feudal 
foundations,  until,  yielding  to  the  force  of  circumstances, 
the  falling  fragments  will  ere  long  be  seen  scattered  about 
the  plain,  each  reaching  no  higher  than  the  modest  villas 
of  the  middle  classes*  that  dot  the  green  vales  of  old 
England.  The  immense  estates  of  the  aristocracy  will, 
to  a  greater  or  less  extent,  undergo  a  process  of  subdivision 
and  distribution  among  a  greater  number  of  holders. 
Free  trade  equalizes  out  of  the  abundance  it  produces — 
the  consuming  millions  profit — freedom  of  exchange  is 
democratic. 

It  is  destined  in  another  manner  to  promote  the  freedom 
of  the  English  people.  Prices  of  agricultural  produce 
coming  down  under  the  effect  of  foreign  competition,  the 
landlords  will  be  desirous  of  retaining  tenants  who  pay 
their  rents :  so  much  so  as  to  preclude  the  exercise  of 
that  coercion  that  may  have  heretofore  been  practised  in 
directing  the  course  taken  by  the  tenant's  suffrage. 

In   England,  where    various   sorts   of  protection    have 


DEMOCRACY.  177 

combined  to  furnish  an  aristocracy  with  luxuries  while 
a  people  want  necessaries,  land  and  capital  have  combined 
to  maintain  a  supremacy  over  nations,  to  monopolize 
all  trade,  at  the  expense  of  labor.  And  labor,  writhing 
in  its  own  sweat  and  blood,  has  consented  to  exhaust  itself 
in  agonizing  efforts,  because  capital  and  land  have  ever 
held  up  to  its  contemplation  the  pretext  that  it  was 
necessary  to  manufacture  cheaper  than  all  other  nations 
for  the  world's  consumption.  And  the  slaves  of  labor 
have  called  for  protection,  even  while  it  was  drawing 
them  on  to  famine,  unconscious  that  it  was  at  their  cost 
England  has  maintained  for  generations  the  feudality 
of  capital,  and  has  for  years  poured  its  fabrics  into  Brazil 
at  a  loss  of  thirty  per  cent. 

With  Americans,  by  God's  grace,  nothing  but  the 
laissez  faire,  as  yet,  is  needed.  But  in  the  old  world, 
where  ages  of  protection  for  court,  for  feudal  lord,  for 
tythe-fed  prelate,  and  for  capitalist,  have  done  their  evil 
work,  I  would  not  say  too  hastily,  that  laissez  faire  will 
do.  There  labor,  third  element,  long  borne  down  beneath 
the  weight  of  capital  and  land,  sore,  bruised,  and  crushed 
in  body  and  in  spirit,  is  sick,  and  it  is  a  serious,  and  as 
yet,  an  unresolved  question  if  it  possesses  recuperative 
force  sufficient  to  enable  it  to  rise  for  healthy  action 
without  a  medicine  to  cure  its  ills.  There  excessive 
population  creating  much  competition  in  labor,  with  a 
product  from  the  soil  appropriated  most  unequally  through 
the  operation  of  radical  wrong  existing  at  the  foundations 
of  society,  serious  measures  earnestly  adopted,  will  pro- 
bably be  necessary  ;  stern,  economical  principles  must 
be  unflinchingly  applied  in  accordance  with  the  dictates 

8* 


178  SOCIAL  REMEDIES. 

of  an  enlightened  humanity,  before  improvement  will 
have  begun  its  efficient  action. 

The  people  of  the  United  States,  under  existing  institu- 
tions, enjoy  the  two  grand  features  of  educational  facilities 
and  social  position.  These,  combined  with  abundant  pro- 
duction, constitute  the  three  elementary  wants  of  man 
necessary  to  his  progressive  development,  moral  and  phy- 
sical. Whatever  tends  to  entrench  upon  either  of  these 
inflicts  a  wound  upon  the  vitality  of  the  social  system. 

As  the  principle  of  free  but  unprotected  action  works 
with  individuals,  so  does  it  with  communities.  How  has 
this  principle  been  found  to  operate  with  us  ?  Under  our 
institutions,  whose  character  is  of  this  sort,  we  will  find 
that  most  of  our  greatest,  ablest,  most  efficient  men — our 
intellectual  luminaries — have  been  the  poor  boys,  whose 
own  unrestricted  exertions  were  their  sole  protection  against 
the  competition  they  encountered  ;  not  nursed  by  fortune 
nor  the  privilege  of  class,  they  have  achieved  those  ex- 
cellences that  have  commanded  the  admiration  of  man- 
kind. Then  is  it  not  a  false  theory,  that  the  enterprise  of 
the  nation  needs  that  protection  which  its  sons  as  indi- 
viduals have  scorned  to  ask.  and  felt  no  need  of  ?  Labor 
is  holy.  Degrade  not  the  American  working  man  by  the 
charge  of  dependence  upon  the  tariff  impositions  levied 
upon  his  fellow  citizens  to  sustain  him  in  his  labor.  It  is 
not  the  alms  of  protection  the  laborer  wants,  but  justice  ;  a 
system  that  tends  to  pauperism  is  not  the  one  to  benefit 
him.  It  has  been  admitted  by  those  who  advocate  protec- 
tion, that  the  machinery  of  Europe  has  scarcely  ever  been 
sent  to  us  without  American  ingenuity  returning  it  to  her 
with  improvements. 


DEMOCRACY.  179 

What  has  the  laissez  faire  done  for  us  politically  ?  In 
the  words  of  that  arch-organ  of  aristocracy,  the  London 
Times,  speaking  of  our  constitution  :  "  It  has  accomplished 
its  principal  objects,  and  fostered  the  growth  of  a  powerful 
and  prosperous  nation."  The  world  presents  no  such 
spectacle  of  national  advance  in  all  branches  of  improve- 
ment ;  and  this  example  of  the  capacity  of  man  for  self- 
government,  when  the  antecedents  have  partaken  of  the 
necessarily  preparatory  character,  is  of  inestimable  value 
to  mankind,  and  clearly  indicates  the  mission  of  this 
nation.  It  is  evidently  to  furnish  the  world  with  a  pre- 
cedent for  political  and  social  institutions  ;  and,  through 
mutual  intercourse,  to  impart  of  her  own  character  to 
others  now  holding  a  position  less  advanced  in  these  re- 
spects. To  restrict  commercial  intercourse  is  to  retard 
the  progress  of  what  is  designed. 

Free  institutions  aid  each  other,  all  conducing  to  en- 
hance cheapness.  Free  trade,  hand  to  hand  with  the 
others,  has  nothing  to  fear  for  itself.  It  has  been  stated, 
that  some  5000  watchmakers  were  emigrating  from  Neuf- 
chatel  to  this  country.  They  are  led  hither  by  a  desire  to 
share  in  the  benefits  of  our  institutions,  in  so  many  respects 
free.  These  institutions  thus  call  in  the  aptitudes,  the  fa- 
cilities  of  other  regions  to  range  themselves  alongside,  and 
increase  the  number  of  those  channels  in  which  produc- 
tion may  labor  efficiently  and  successfully  against  the 
competition  of  the  world.  CAt^&Wjfa)  ~ 

In  the  general  revulsion  which  in  E»§la»d  is  breaking 
up  old  political  and  financial  systems,  and  forming  new,  it 
is  to  be  hoped  that  the  element  of  free  exchange  may  be 
infused  universally  into  the  new  systems.  The  new  spirit 
abroad,  or  rather  its  advanced  manifestation,  may  consist- 


180  SOCIAL  REMEDIES. 

ently  adopt  the  principle  of  free  exchange.  Washington, 
Hamilton,  and  Napoleon,  are  said  to  have  opposed  it.  Yet, 
while  these  men  were  the  embodiments  of  free  republican 
principles,  they  more  or  less  unconsciously  represented  the 
conservative  spirit  that  had  for  ages  been  paramount.  In 
the  latter  it  lifted  him  upon  the  imperial  throne,  as  a  con- 
sequence, or  by  means  of  the  unpreparedness  of  the  gene- 
ral mind  for  the  full  practice  of  that  republicanism,  he 
doubtless  appreciated  and  loved  as  the  destiny  of  France. 
Napoleon's  republican  sentiments  were  of  the  practical  for 
the  Europe  of  that  day — his  empire  the  reaction  of  excess, 
the  oscillation  of  the  pendulum.  And  the  new  Napoleon, 
is  not  his  the  republicanism  of  this  day  ?  It  is  hitherward 
those  countries,  now  in  the  throes  of  regeneration,  look  for 
observatidn  of  the  excellences  democracy  can  yield. 

In  this  age,  when  force  is  circumscribed,  despotism  has 
instinctively  appropriated  to  its  use  the  instrument  of 
tariffs,  as  well  calculated  unperceived  to  further  unjust 
designs.  It  is  not  so  strange  that  protection  should  have 
existed  in  Europe,  where  the  power  of  making  laws  has 
been  in  the  hands  of  a  few  who  were  profited  ;  when  the 
laboring  masses,  who  were  the  sufferers  by  protection,  have 
had  no  voice  in  framing  the  laws.  But  in  this  country, 
where,  comparatively,  every  man  is  a  constituent  of  the 
government  and  the  laws,  it  is  passing  strange  that  it  should 
be  advocated.  It  is  only  to  be  accounted  for  on  the 
ground  of  ignorance  of  effects,  and  is  another  evidence  of 
thejforce  of  example,  and  of  the  obstinacy  with  which  error, 
inherited  and  bearing  long  prescriptive  sway,  clings  to  the 
human  mind. 

I  have  said  that  laissezfaire  is  sufficient  for  us.     As  yet 
it  is.     But  if  we  permit  a  cessation  of  the  effort  at  stran- 


DEMOCRACY.  181 

gling  the  young  worm — protection,  that,  dropped  from  the 
spawn  of  the  old  world,  had  begun  to  grow  and  gain  a 
prideful  strength  wherewith  to  gnaw  the  bud  of  our  fair 
promise  and  spread  disease  throughout  our  healthy  vitals, 
we  may  get  past  the  virtue  of  this  healthy  remedy.  Under 
the  genial  warmth  of  the  sun  of  Christianity  we  have  cul- 
tivated the  Tree  of  Liberty  to  a  spreading  growth.  May 
it  not  be  deprived  of  that  comely  branch  just  sprouting  from 
its  ample  trunk — free  trade.  It  grows,  that  noble  branch, 
and  yields  of  its  fruit  for  the  profitable  gathering  of  the 
several  intercommunicating  states ;  but  if  the  worm  of  pro- 
tection be  permitted  to  eat  its  way,  much  that  would  other- 
wise  come  to  fair  and  nutritious  perfection  will  fall  to 
earth  in  foul  decay. 

Advanced  in  physical  and  moral  power  as  she  is,  it  de- 
volves upon  the  United  States,  in  establishing  the  true 
"  American  system,"  to  realize  the  happiest  effort  of  the 
genius  of  commerce,  by  throwing  open  her  ports  to  univer- 
sal free  trade :  in  return  to  gather  unto  herself  the  fruits 
of  every  clime,  the  profits  of  every  nation's  labor,  whilst 
paying  them  in  kind.  It  is  fitting  that  it  should  be  the 
glory  of  this  country  to  be  the  first  among  the  great  nations 
to  achieve  to  the  full  this  step  towards  the  consummation 
of  democracy. 

Here,  in  the  broad  valley  of  the  "  Father  of  Waters," 
should  rise  that  universal  shout  of  triumphant  humanity, 
which,  echoing  and  re-echoing  along  the  ragged  peaks  of 
Jura,  and  the  lofty  heights  of  the  Ural,  will  yet  awaken  the 
millions  of  China  from  their  dream  of  celestial  exclusive- 
ness,  and  arouse  the  men  of  Japan  to  burst  their  self-im- 
posed bonds,  as  they  throw  wide  open  their  ports  to  the 
free  entry  of  all  the  world  ! 


XX. 

OVER. GOVERNING. 

WHAT,  besides  freedom  of  exchange,  is  embraced  in  the 
laissez  faire,  so  desirable  and  sufficient  for  the  people  of 
this  country  ?  It  is  not  fitting  here  to  do  more  than 
enumerate  some  of  the  analogies  and  antagonists  contrast- 
ed with  free  exchange.  Were  the  author  competent  to  the 
task,  there  is  not  space  within  the  prescribed  limits  of  this 
volume,  for  the  full  consideration  of  a  question  that,  in  its 
details,  involves  all  the  subjects  coming  within  the  pro- 
vince of  government,  and  embraces  various  shades  of  ex- 
pediency. Thence  comes  the  call  for  a  degree  of  intelli- 
gence in  the  people,  whose  business  it  is  to  define  the 
metes  and  bounds  of  government,  and  in  those  who  legis- 
late under  and  administer  its  functions,  that  embraces  a 
wide  field  of  acquirement,  unhappily  not  always  com- 
passed. 

Hopefully  we  look  for  the  time  when  an  enlightened 
statesmanship  throughout  the  Christian  world  shall  assume 
and  practise  to  the  full  the  theory  of  humanity,  so  far 
as  demanded  by  the  intelligent  call  of  the  people,  avoiding 
the  ultraisms  decked  with  its  name.  Heretofore,  such  has 
been  much  of  the  action,  that  the  term  politician  is,  even 
in  this  country,  a  synonyme  for  the  contracted  cunning  of 


OVER-GOVERNING.  13 

an  intriguing  selfishness,  that  talks  of  public  welfare  while 
thinking  only  of  individual  advantage.  And  this  is  not  all 
undeserved.  Without  an  idea  beyond  self  and  party, 
whose  rewards  shall  pamper  self,  politicians,  like  the 
^Eolian  harp,  that  gives  forth  its  musical  tones,  all  uncon- 
scious of  their  nature  and  effects,  mounted  upon  their 
stump  pedestals,  discourse  in  soft  and  sounding  strains  the 
notes  of  patriotism,  of  love  of  labor,  and  of  glory,  as  the 
wind  of  popular  sentiment  bloweth  high  or  low  upon  their 
own  insensate  selves.  Catching  the  tones  with  which  the 
breeze  is  laden,  as  they  are  wafted  towards  them,  these  in- 
struments of  sound  are  without  conception  of  the  spirit  of 
the  music  that  dwells  within  the  great  heart  of  humanity, 
and  is  breathing  its  tones  in  a  spontaneous  education  in 
and  around  the  minds  and  hearts  of  the  masses. 

The  Press  is  not  free  from  this  condition.  It  is  the 
tongue  of  progress,  but  not  the  brain.  It  is  the  great  car- 
rier of  ideas  and  sentiments  which,  in  the  minds  and 
hearts  of  the  people,  have  gone  out,  and  are  still  advancing 
before  it  in  the  great  march  of  human  progress.  Public 
sentiment  leads  and  directs  the  press,  which,  in  general, 
forms  it  so  far  as  in  operating  as  a  medium  of  communica- 
tion between  individual  minds,  embodying  and  giving  ex- 
pression to  the  prevailing  sentiments,  and  bringing  them 
directly  under  the  notice  of  each  and  all,  what  is  indi- 
vidual becomes,  through  its  agency,  general.  This  is  no 
unimportant  part,  but  one  as  weighty  as  is  the  difference 
between  promulgating  the  good  and  circulating  the  bad. 
As  the  distributing  agent,  for  promoting  spontaneous  educa- 
tion going  on  among  the  masses,  it  is  a  powerful  instru- 
ment for  good  or  evil ;  an  agent  with  sublime  capacities 
for  educating,  under  the  dominion  of  the  Great  Master, 
Liberty,  taught  by  which  most  efficient  of  teachers,  the 


184  SOCIAL  REMEDIES. 

duty  that  waits  upon  every  right  is  understood  by  citizens  ; 
and  with  the  acquisition  of  each  right,  the  corresponding 
duty  is  not  likely  to  be  violated. 

Freedom  of  exchange,  it  cannot,  with  truth,  be  denied, 
is  one  of  those  rights  for  which  civilized  man  is  prepared, 
and  therefore  it  is  ultra-conservatism  to  withhold,  and  is 
not  ultra-radicalism  to  grant  it.  Disturbing  by  arbitrary 
equal  distributions  the  right  to  acquisition  of  property, 
through  useful  competition,  is  ultra- radicalism.  Free  ex- 
change, on  the  contrary,  excites  an  universal  competition, 
a  cheering  rivalry,  reducing  prices,  facilitating  invention, 
promoting  the  useful  arts,  and  scattering  abroad,  within 
reach  of  all,  the  gratification  of  all  wants.  The  right  to 
have  a  voice  in  making  the  laws,  the  right  of  every  citizen 
to  enter  into  free  and  open  competition  for  the  highest 
offices  that  administer  those  laws,  and  other  rights,  are  with- 
held, in  many  countries,  by  the  force  of  this  ultra-conser- 
vatism, which  denies  the  right  to  free  exchange.  Ultra- 
conservatism  and  protection  are  synonymous.  True 
liberty,  the  elements  of  which,  both  social  and  political, 
Americans  enjoy,  lies  in  neither  of  these  ultras,  radical  or 
conservative  ;  either  of  which  governs  too  much.  The 
radical  system  of  the  Right  to  Labor,  now  agitating  in 
France,  authorizing  any  person  to  demand  work,  and  re- 
quiring the  state  to  give  it,  or  payment  instead,  may  be 
instanced  as  an  ultraism  that  has  no  analogy  with  freedom 
of  exchange.  It  would  be  an  extension  of  the  poor-house 
system,  beyond  its  legitimate  scope,  to  a  degree  that  would 
effect  a  serious  wound  upon  individual  energy  and  self- 
reliance,  upon  industrial  and  social  progression  ;  and  in- 
creasing the  non-producing  drones  in  the  social  hive, 
would  aggravate  the  evil  sought  to  be  remedied. 

For  the  state  to  guarantee  the  right  to  labor,  the  securing 


OVER-GOVERNING.  185 

of  physical  aliment,  is  of  that  governing  too  much,  which 
violates  liberty.  It  is  as  much  so  as  is  the  establishment  by 
the  state  of  church  revenues  and  government  for  securing 
the  spiritual  aliment  of  its  people;  and  more  so  than  the 
establishing,  endowing,  and  sustaining  of  great  universities 
for  supplying  the  more  refined  intellectual  aliment  of  its 
youth,  and  keeping  up  the  sacred-  fire  of  a  high  degree  of 
knowledge.  It  is  analogous  to  the  overgoverning  of  fixing 
by  law  a  maximum  rate  of  wages,  forbidding  combinations 
of  laborers  to  obtain  higher  rates,  which  in  turn  is  kindred 
to  that  of  establishing  a  maximum  rate  of  interest,  declar- 
ing that  the  profit  on  money  shall  be  limited  to  a  certain 
rate,  whilst  all  other  commodities  are  justly  allowed,  sans 
protection,  to  rise  and  fall  with  the  natural  operation  of  the 
laws  of  trade.  And  to  these  is  analogous  that  much 
abused  power  of  governments — a  power  which  all  people 
in  amended  constitutions  will  probably  yet  wrest  from  the 
grasp  of  legislative  prerogative — to  manufacture  a  repre- 
sentative of  value  for  general  use  that  bears  none  of  the 
value  imparted  by  cost  of  production  and  a  supply  regu- 
lated by  a  natural  demand.  Conferring  upon  such  indi- 
viduals as  may  be  employed  by  the  people  to  administer 
the  public  business  privileges  not  enjoyed  by  their  fellow 
citizens,  especially  when  liable  to  abuse  like  the  franking 
privilege,  is  also  inconsistent  with  the  laissez  faire  which 
acknowledges  freedom  of  exchange. 

In  the  United  States,  where  the  public  have  the  resour- 
ces, possess  the  intelligence  to  appreciate  the  objects,  and 
are  capable  from  practice  of  originating  and  conducting 
such  great  enterprises  as  are  required  by  the  general 
interest,  the  people  would  be  shocked  atr  the  proposition  of 
government  to  assume,  by  a  stretch  of  over-governing,  the 


186  SOCIAL  REMEDIES. 

ownership  and  management  of  all  the  railways,  or  of  the 
great  farms  or  manufactories ;  in  short,  any  of  the  great 
direct  agencies  of  production  not  too  large  to  be  contracted 
or  worked  by  the  capital  of  companies  or  individuals. 

Opposition  would  also  be  excited  at  witnessing  the 
government  undertake  that  governing  too  much  which 
would  be  practised  in  limiting  by  law  the  amount  an 
individual  might  acquire  by  inheritance — a  measure 
which  has  been  approved  by  high  foreign  economical 
authority.  How  little  any  such  law  is  necessary  under 
our  free  system  of  laissez  faire  is  attested  by  the  following 
from  LyelUs  Travels  in  America  : — "  Munificent  bequests 
and  donations  for  public  purposes,  whether  charitable  or 
educational,  form  a  striking  feature  in  the  modern  history 
of  the  United  States,  and  especially  of  New  England. 
Not  only  is  it  common  for  rich  capitalists  to  leave  by  will 
a  portion  of  their  fortunes  towards  the  endowment  of 
national  institutions,  but  individuals  during  their  life-time 
make  magnificent  grants  of  money  for  the  same  objects. 
There  is  here  no  compulsory  law  for  the  equal  partition  of 
property  among  children,  as  in  France,  and,  on  the  other 
hand,  no  custom  of  entail  or  primogeniture,  as  in  England, 
so  that  the  affluent  feel  themselves  at  liberty  to  share  their 
wealth  between  their  kindred  and  the  public,  it  being 
impossible  to  found  a  family ;  and  parents  having  fre- 
quently the  happiness  of  seeing  all  their  children  well 
provided  for  and  independent  long  before  their  death.  I 
have  seen  a  list  of.  bequests  and  donations  made  during  the 
last  thirty  years  for  the  benefit  of  religious,  charitable,  and 
literary  institutions  in  the  State  of  Massachusetts  alone, 
and  they  amounted  to  no  less  than  six  millions  of  dollars." 
The  extension  of  the  principle  leads  to  the  total  abolition 


OVER-GOVERNING.   •  187 

of  the  right  of  inheritance,  which  is  in  fact,  like  the  right 
to  labor,  one  of  the  theories  of  the  socialism  of  the  day, 
that  would  extend  the  principle  to  an  extreme,  and  invest 
all  the  sources  of  wealth  in  the  state — a  dangerous  cen- 
tralization of  a  mighty,  of  all  power,  and  destructive  of  all 
individual  independence,  sacrificed  to  the  worst  of  des- 
potisms. 

Consumption  and  Labor  are  one — all  over-governing 
is  one  in  opposition  and  oppression. 

Gradually,  step  by  step,  we  are  witnessing  the  with- 
drawal from  the  hands  of  the  state,  to  be  distributed  among 
the  people,  and  conducted  by  private  enterprise,  not  only 
the  political  action,  but  the  various  institutions  and  enter- 
prises, whose  object  and  effect  has  been  the  improvement 
or  convenience  of  the  people.  We  now  see  a  leading 
postal  agency,  the  magnetic  telegraph,  conducted  by  indi- 
vidual enterprise.  It  is  a  popular  maxim  that  it  costs  the 
government  more  to  do  anything  than  it  does  individuals. 
It  is  generally  believed,  with  much  truth,  that  enterprises 
are  conducted  more  expeditiously,  with  less  expense,  and 
with  less  annoyance  to  the  public,  by  individuals  than  by 
the  government.  The  variety  of  methods,  and  the  various 
capabilities  brought  to  the  task  of  accomplishing  an  enter- 
prise by  individuals,  afford  probabilities  for  its  being  much 
better  done  .than  when  the  government  method,  and  the 
administration  of  its  set  of  officials,  only  are  employed. 
The  absence  of  a  personal  interest  in  those  administering, 
operates  against  successful  performance. 

The  subject  of  governmental  reform,  which  embraces 
with  free  exchange  those  kindred  and  those  antagonistic 
principles  and  measures  just  glanced  at,  resolves  itself 
into  the  compound  proposition  of  what  properly  enters  into 


188  SOCIAL  REMEDIES. 

the  province  of  government,  and  how  much  of  that  admit- 
ted properly  belongs  to  the  people,  unreleased  to  the  action 
of  their  delegated  representatives,  in  the  several  branches 
of  government.  Therefore,  under  this  latter  proposition, 
another  and  deeper  consideration  of  the  subject  should  not 
be  overlooked.  This  is  respecting  the  individuation  of  the 
independent  human  being.  Each  possesses  an  inward 
consciousness,  there  is  a  certain  extent  of  domain  in  the 
life  of  each  person,  a  sacred  temple,  embracing  himself, 
his  family,  and  property,  upon  which  no  power,  whether 
of  one  or  of  the  public,  should  be  permitted  to  encroach 
intrusively.  The  action  or  influence  of  government  should 
not  be  brought  to  bear  upon  this  private  life,  to  control  it. 
The  truth  of  the  principle  was  acknowledged  by  this  coun- 
try in  the  early  severance  of  church  from  state.  But  there 
are  other  avenues  through  which  the  abuse  may  find  ad- 
mission. The  tendency  of  public  opinion  is  to  invest  all 
power  in  the  masses.  With  the  abundant  good  effects  of 
this  democratizing  principle,  there  is  the  attendant  danger 
of  a  suppression  of  that  originality  of  mind  and  individu- 
ality of  character  so  necessary  to  progressive  improvement, 
inasmuch  as  the  public  are  ready  to  impose  their  opinions 
and  tastes  upon  individuals,  coercing  them  to  their  views, 
through  the  tyranny  of  the  majority,  exercised  by  dele- 
gates quite  ready  to  commit  acts  of  injustice,  in  order  to 
gain  popularity  with  those  they  represent.  The  effect  is 
to  bind  and  sacrifice  what  it  should  be  the  aim  of  purely 
democratic  institutions  to  cherish — individual  independence 
of  thought  and  speech  (a  sacrifice  sometimes  exhibited  in 
the  slavery  of  party) ;  and  therefore  in  a  democracy  it  is 
safest  to  limit,  as  far  as  possible,  the  functions  of  govern- 
ment, leaving  to  individual  enterprise  whatever  can,  be 


OVER-GOVERNING.  189 

administered  without  the  agency  of  the  representatives  of 
the  people  collectively.  In  other  words,  it  is  vitally  essen- 
tial to  the  liberty  of  the  human  being  in  this  country,  that 
the  legislative  and  administrative  action  should  be  consti- 
tutionally confined  to  the  smallest  possible  extent. 

A  happy  power  of  neutralizing  excessive  action,  when 
it  may  have  been  committed  by  the  legislative  branch, 
exists  in  the  veto  power.  As  long  as  the  constitutional 
imperfections  that  exist  are  in  force,  enabling  government 
to  act  where  they  should  have  no  power  to  act  at  all  in 
the  premises,  the  beneficial  effects  of  such  checks  and 
counter  checks  in  the  neutralization  they  effect,  will  re- 
duce largely  the  field  of  over-governing  motion. 

The  right  of  individuals  to  express  their  opinions  of 
what  is  right  and  wrong  is  one  thing  ;  the  investiture  of 
government  with  power  of  coercion  in  the  premises  is 
another,  even  though  that  government  be  the  embodiment 
of  a  majority. 

In  short,  all  acts  of  a  federal  government  having  a  cen- 
tralizing tendency,  that  prevent  or  obstruct  the  diffusion 
among  the  people  of  the  controlling  power  over  the  agents 
of  production,  land,  capital,  and  labor,  and  their  results ; 
for,  as  is  the  principle  between  individuals  and  state,  so  in 
a  confederated  system  of  states,  whatever  may  be  done  by 
these  separately,  should  not  be  assumed  by  the  general 
government ;  and,  in  the  morale  as  well  as  the  physique, 
that  withdraw  their  control  over  the  political,  religious, 
educational,  and  judicial  departments,  and  consolidate  it 
in  a  central  power  ;  and  all  conferred  or  assumed  * func- 
tions that,  intermeddling  with  individuals,  go  further  than 
to  prevent  the  entrenchment  by  one  citizen,  through  force, 
fraud,  or  negligence,  upon  the  rights  of  another  to  his  in- 


190  SOCIAL  REMEDIES. 

jury,  are,  as  a  general  rule,  the  action  of  excessive  govern- 
ment. 

Government  should  leave  to  a  people  the  instrument  of 
liberty  ;  and,  under  the  local  governments,  they  should  be 
instructed  through  the  education  afforded  to  all  by  com- 
mon schools — leaving  it  optional  with  parents,  no  expense 
existing,  to  send  their  children  or  not — how  to  wield  the 
instrument.  Beyond  this  all  interference  is  dangerous, 
and,  with  limited  exceptions,  liable  to  encroach  upon  the 
domain  of  freedom.  The  practical  education,  a  most  ne- 
cessary feature,  that  results  from  the  direct  individual  par- 
ticipation in  the  affairs  of  government  by  each  constituent 
of  the  democracy  thinking  and  acting  for  himself  in  his 
own  local  as  well  as  in  the  general  administration,  will  do 
the  rest  in  developing  the  freeman. 

Freedom  is  incomplete  without  education.  Whatever 
the  laws  may  prescribe  or  forbid,  if  it  does  not  meet  with 
response  in  the  moral  consciousness  of  the  individual,  if 
what  the  law  expresses  is  not  confirmed  ^understandingly 
by  the  intelligent  conscience  of  the  subject,  the  law  is 
occupying  the  position  of  tyrant  master,  the  subject  citizen 
fills  that  of  slave.  It  is  important  to  humanity  that  the  in- 
crease of  education  should  everywhere  be  co-extensive 
with  the  growth  and  spread  of  the  democratic  principle. 
To  its  being  so  here  may  be  attributed  the  progress  re- 
vealed in  the  history  of  this  country.  As  long  as  it  shall 
be  so,  the  day  will  not  arrive  when  he  that  cannot  write 
shall  ostracize  an  Aristides  because  he  may  be  just. 


XXI. 

SOCIALISMS— FREE  L  A  BOR— PROGRE  SS. 

THE  attempts  to  reconstruct  society  exhibit,  many  of 
them,  scenes  of  energies  wasted  upon  impracticable 
theories.  Instead  of  taking  man  in  his  individuality,  they 
first  require  that  he  should  sink  his  natural  love  of  per- 
sonal independence,  forget  jealousy  and  distrust,  be  unsel- 
fish, in  short,  become  other  than  man,  before  he  can  occupy 
the  field  of  action  prepared  for  him.  Some  would  burst 
the  bonds  of  that  organization  supreme  wisdom  has  formed, 
for  binding  together,  by  the  tie  of  natural  affections,  the 
families,  as  integral  parts  of  the  public  body,  through 
them  securing  its  moral  integrity ;  and  for  holding  the  in- 
dividual to  the  service  of  all  through  his  labors  for  particu- 
lar self,  thus  preserving  the  social  integrity  of  the  whole. 

The  improvements  to  be  sought  are  those  which  are 
being  wrought  by  the  increasing  intelligence  of  free  men, 
and  which,  in  extending  and  perfecting  the  forms  of  their 
business  relations  in  the  various  departments  of  production, 
exchange,  consumption,  and  insurance,  thrill  along  the  elec- 
tric cord  of  interest,  and  are  felt  at  the  hearth-stones  of  all 
conditions,  from  the  millionaire  to  the  humblest  artisan.  The 
various  relations  of  man  with  man  where  services,  values, 
and  equivalents  are  involved;  these  relations,  as  estab- 


19iJ  SOCIAL  REMEDIES. 

lished  and  fostered  by  unrestricted  commerce  and  its  ad- 
juncts in  all  branches,  in  all  the  forms  of  mutual  inter- 
course, where  profit  and  security  for  families  and  indi- 
viduals are  sought,  and  losses  avoided,  these  will  thrive. 
They  are  practicable,  are  consistent  with  the  nature  of 
things,  and  they  will  flourish  and  spread  while  men  pos- 
sess the  power  of  calculation  and  love  of  acquisition. 
Their  variety  will  increase,  and  their  character  im- 
prove, with  the  increase  of  that  intelligence  ever  following 
in  the  footsteps  of  Christianity  and  free  government. 

None  of  those  chimerical  schemes  of  association,  that 
call  for  the  change  of  existing  relations,  and  an  entire 
subversion  of  the  institutions  which  constitute  the  corner 
stones  of  society,  can  exist,  save  in  the  speculations  of  the 
dreamer.  No  ism  seeking  to  fuse  into  an  ill-assorted 
mass  the  portions  designed  to  remain  inviolate,  each  within 
its  sacred  boundary,  will  serve  any  other  purpose  than  to 
aiford  vent  for  working  off  the  froth  of  zealous  eccentricity, 
or  to  furnish  material  for  the  schemes  of  politicians. 

If  we  would  accomplish  aught  in  the  cause  of  humanity, 
we  must  gain  man  to  our  cause  through  his  interest — that 
principle  stronger  than  all  others.  That,  only,  can  prove 
to  be  the  true  social  science,  which,  while  it  invites  man 
to  the  extremity  of  individual  action  voluntarily  laboring 
for  his  special  ends,  at  the  same  time  leaving  each  to  find 
the  pursuit  congenial  to  his  tastes,  habits,  capacity,  or 
condition,  accomplishes  the  collective  improvement  of  the 
species.  Is  it  said  that  this  theory  of  laboring  only  for  self, 
involves  a  denial  of  the  practicability  of  Christianity,  which 
requires  man  to  become  unselfish,  in  order  to  practise  its 
requirements,  to  turn  the  other  when  smitten  upon  one 
cheek,  and  do  unto  others  as  he  would  they  should  do  urto 


SOCIALISMS.  193 

him  ?  I  reply,  in  requiring  these,  Christianity  exacts  no 
sacrifice  of  individuality,  no  merging  of  identity  in  a 
physical  and  moral  agglomeration.  It  is  self  practising 
obedience  to  a  divine  law  for  the  saving  of  self;  it  is  a 
spiritual  effort  where  mind  triumphs  over  matter,  because 
of  a  conviction  that  self  is  to  be  spiritually  benefited. 
But,  in  a  material  capacity,  there  is  no  total  abnegation ; 
man  will  labor  only  for  an  immediate  interest,  because  his 
individuality  of  self  is  composed  of  his  property  and 
family,  as  well  as  the  more  intimate  immaterial  mind  and 
material  body,  and  the  moment  he  ceases  to  exert  his 
faculties  for  these,  there  is  no  longer  provision  for  their 
sustenance,  and  he  ceases  to  exist.  This  alternative,  the 
first  law  of  nature,  the  divine  institution  of  marriage,  con- 
secrated by  practice  of  the  mother  of  Christ  himself,  and 
the  force  of  the  natural  affections,  all  alike  forbid. 

Man  should  be  taken  as  he  is,  taken  with  the  ties  of 
family  upon  him,  spurring  him  on  to  individual  competi- 
tion. His  improvement  must  be  worked  out  by  himself; 
no  power  is  great  enough,  save  Divine,  and  that  power  has 
ordained  that  he  shall  do  his  own  work,  to  do  it  for  him. 
There  will  be  no  new  creations ;  with  the  elements  that 
exist,  with  the  qualities  that  belong  to  his  nature,  man 
must  work  improvement  of  those  elements  arid  qualities, 
and  develope  himself.  Give  him  equal  chances  with  his 
fellows,  but  no  protection  that  shall  offer  a  premium  to 
inferiority  of  production,  to  indifferent  action.  Do  not  at- 
tempt to  make  him  equal  in  all  social  points  with  his 
fellows  ;  but  give  him  the  atmosphere  of  liberty  in  which 
to  breathe,  remove  all  barriers  between  him  and  his  right- 
ful customer,  the  world's  consumption,  and  he  will  find 
his  point  d'appui,  and  make  himself  an  equal  in  all  enjoy. 

9 


194  SOCIAL  REMEDIES. 

ments  his  labor  may  achieve.  The  uncertainties,  the 
necessities  calling  upon  him  to  act,  the  incentives  identify- 
ing him  with  to,  from  all  these  is  evolved  that  sense  of 
enjoyment,  and  is  wrought  that  varied  improvement  for 
which  man  is  placed  upon  earth  to  labor. 

All  men  have  been  created  equal,  but  they  have  been 
invested  with  gifts  (as  the  excellent  and  wise  Leather- 
stocking  styles  them)  so  different,  that  though  all  should 
set  out  from  the  same  point,  no  two  would  arrive  at  the 
same  end.  All  those  systems,  or  theories,  which  would 
compress  them  into  one  uniform  social  equality  of  receipts 
or  expenditures,  of  habits,  tastes,  affections,  or  acquire- 
ments, will  be  found  to  be  as  impracticable  as  it  would  be 
to  force  all  men  to  grow  to  an  uniform  height  by  compress- 
ing their  frames  into  boxes  of  an  equal  length.  The 
physical  deformities  of  such  an  effort  would  be  rivalled  by 
the  moral  ones.  The  equality  of  men  is  that  of  rights,  but 
while  seeking  to  raise  those  now  oppressed  avoid  protecting 
them  in  turn : 

For  ev'ry  right  mankind  may  claim 
A  duty  waits  to  give  a  name. 

It  is  the  fashion  of  the  day  to  attach  much  importance 
to  associative  effort.  And  much  is  indeed  due  to  it.  In 
certain  cases  of  industrial  effort  it  produces  great  results. 
But  to  what  extent  it  may  be  profitably  adopted  socially, 
is  a  question  yet  to  be  resolved.  Individual  effort,  with 
the  way  left  open  for  the  free  interchange  of  the  results 
of  effort,  is  calculated  to  develope  truth.  Where  mind 
has  delved  in  the  mine  of  science,  single-handed  exertion 
has  always  effected  the  greatest  result  in  proportion  to  the 
labor  expended.  Experience  has  shown,  that  in  the 


SOCIALISMS.  195 

weighty  undertakings  of  manufacturing,  larger  production 
in  proportion  to  the  effort  of  industry  has  been  realized 
where  the  operations  have  been  conducted  upon  a  large 
scale,  by  machinery,  involving  the  investment  of  much 
capital.  On  the  other  hand  it  has  been  found  in  agricul- 
ture, that  the  most  profitable  effects  have  resulted  from  the 
system  of  small  farms,  where  the  labor  was  narrowed 
down  to  individual  effort,  and  the  limit  of  co-operation  was 
confined  to  a  single  family,  owning  the  land  it  cultivated. 
It  is  "  the  magic  of  property  which  turns  sand  into  gold," 
says  Arthur  Young  •  "  give  a  man  the  secure  possession  of 
a  bleak  rock,  and  he  will  turn  it  into  a  garden." 

The  corporate  principle  is  in  operation  in  this  country, 
and  yielding  beneficial  results  where  insurance,  factories, 
and  fishing  voyages  are  conducted  under  its  action.  How 
far,  beyond  its  present  extent,  association  may  be  adopted 
through  the  contractors  of  industry  admitting  laborers  to 
partnerships  of  a  mixed  character  of  wages  and  profits,  is 
a  question  between  them,  is  a  matter  for  private  contract, 
not  for  legislative  action,  beyond  a  liberal  law  of  partner- 
ship. It  may  doubtless  be  so  adopted  to  a  very  considera- 
ble extent  with  great  success  in  both  points  of  improving 
the  condition  of  the  laborer,  and  of  achieving  a  larger 
production.  And  mechanics  and  tradesmen  may  associate 
for  corporative  action  so  far  as  their  occupations  are  con- 
cerned, and  conducting  the  business  in  squads  not  too 
extended,  the  combinations  may  successfully  divide  among 
themselves  the  labor  and  proceeds.  It  is  desirable  that 
such  attempts  should  be  made  and  encouraged,  in  order 
that  labor  may  as  far  as  possible  attain  to  its  third  and 
rightful  position.  In  early  days  it  occupied  the  place  of 
slave  to  capital  or  power,  which  in  exchange  for  its  efforts 


196  SOCIAL  REMEDIES. 

accorded  food  and  clothing ;  next  the  place  of  servant, 
where  wages  rewards  its  services ;  it  remains  for  it  to 
attain  to  the  position  of  partner,  receiving  the  reward  of 
profits.  It  is  true  the  laborer  receives  a  portion  of  the 
profits  now,  in  the  form  of  wages.  In  order  to  promote 
his  further  advance,  it  is  necessary  to  increase  the  demand 
for  his  services,  and  improve  his  condition  ;  then  his  wages 
rise,  his  reward  is  increased.  The  wages  cannot  be 
raised  perforce  by  the  social  theories,  any  more  than  the 
mercury  indicating  improved  temperature  can  be  properly 
raised  in  the  thermometer  by  other  means  than  the  exist- 
ence of  greater  heat  in  the  surrounding  atmosphere.  The 
terms  of  wages  and  services  are  rightful,  and  this  condition 
must  continue  until,  under  the  regime  of  free  institutions 
and  general  education,  the  ameliorations  and  intellectual 
improvements  are  effected,  that,  raising  the  character  of 
the  laborer,  his  privileges,  and  his  standard  of  requirements, 
will  gradually,  and  as  it  were  imperceptibly,  enlarge  the 
domain  of  partnership  and  ownership,  while  that  of  servi- 
tude recedes  in  the  commercial,  mechanical,  and  agricul- 
tural departments  of  productive  industry. 

In  all  the  economical  achievements  necessary  to  social 
amelioration,  whether  it  be  where  the  collective  action  of 
co-operative  association  in  large  manufacturing  establish- 
ments using  costly  machinery,  in  the  construction  of 
railways  and  in  organizations  for  insurance,  are  the  effect- 
ive agencies ;  or  whether  it  be  in  the  scientific,  agricultural, 
mechanical,  commercial,  or  other  departments  where 
individual  enterprise  labors  most  effectively  single  handed, 
all  are  left  in  principle  and  fact  to  competitive  individual 
action,  and  all  the  personal  incentives  have  full  play. 

The  associative  theories  deprecated  in  this  chapter,  are 


SOCIALISMS.  197 

of  a  different  character  from  these.  They  call  for  a 
more  extended  association.  The  industrial  forms  of 
association  just  noticed,  are  liable  to  be  broken  up  when 
the  reverses  of  business  shall  reduce  to  bankruptcy  the 
particular  body,  as  individuals  are  affected  by  like  causes. 
This  induces  theorists  to  seek  for  a  form  of  association 
going  beyond  these  that  simply  effect  greater  production 
in  consequence  of  their  united  action,  and  are  liable  to 
dissolution  through  the  ordinary  casualties,  leaving  the 
individual  members  cast  upon  society  seeking  subsistence. 
The  association  sought,  in  order  to  be  independent  of  the 
external  world,  is  required  to  embrace  within  itself  the 
production  of  all  the  means  of  subsistence ;  it  must  be  an 
intricate  machine  with  all  the  processes  of  production  and 
consumption  in  operation,  and,  therefore,  complete  in  all 
the  elements,  and  their  action,  constituting  society  ;  must 
be  governed  by  an  organization  that  shall  admit  of  no 
departure  from  the  workings  of  the  machine  by  which  it 
effects  all  processes  of  the  complicated  social  organization 
in  the  present  form.  The  experiment,  when  undertaken, 
soon  developes  the  existence  of  natural  causes  that  threaten 
its  dissolution.  The  various  qualifications,  aptitudes, 
tastes,  &c.,  of  the  individual  members,  early  produce 
their  natural  fruit  of  inequalities  of  acquisition,  and  the 
individual  particles  fly  off  from  the  common  centre,  some 
rising,  and  others  falling  far  below  the  medium.  To 
remedy  the  difficulty,  and  keep  the  erratic  particles  within 
the  common  round  of  industrial  and  social  action,  the 
abolition  of  private  property  is  decreed. 

Then  is  required  from  every  member  an  equal  amount 
of  labor,  with  the  contingent  equality  in  the  division  of 
labor's  production.  Thus  stand  the  theories.  But  how 


198  SOCIAL  REMEDIES. 

must  they  work  in  practice  ?  The  produce  of  the  industry 
of  the  community  being  divided  would  not  insure  any 
certainty  that  the  labor  had  been,  which  indeed  it  never 
could  be  when  we  consider  the  diversity  in  aptitudes, 
physical  and  mental  power,  and  the  difficulty  of  deciding 
how  much  of  a  certain  kind  of  labor  is  equivalent  to 
another.  The  labor  not  being  divided,  would  be  a  promi- 
nent fact  that  would  stand  out  so  conspicuously  as  to 
come  in  contact  with  the  mental  sensibilities  of  every 
member,  and  create  irreconcilable  differences.  The  call 
of  justice  for  remedying  these  inequalities  of  imposition 
would  never  find  a  response  save  in  dissolution.  Com- 
munism would  provide  a  remedy  for  this  difficulty  by 
requiring  each  individual  to  work  by  turns  at  every 
occupation.  This  arrangement  would  involve  a  sacrifice 
of  all  the  advantages  attendant  upon  "  every  one  to  his 
trade,"  as  the  popular  adage  expresses  a  truth ;  and,  all 
the  gain  experienced  by  the  division  of  labor  being  lost, 
production  would  be  materially  diminished.  One  horn  of 
the  dilemma  is  a  dissolution,  the  other  diminished  produc- 
tion. The  disadvantage  sought  to  be  avoided  that  attends 
upon  the  reverses  of  trade,  affecting  the  practical  industrial 
organizations  before  noticed,  is  not  escaped ;  while  the 
advantages  of  the  enlarged  production  which  they  effect, 
are  lost  in  the  effort  to  construct  the  social  machine. 
Its  effects  are  a  sacrifice  of  individual  independence, 
the  compression  of  intellect  into  a  fixed  mould,  the  reduc- 
tion of  each  member  of  the  unnatural  association  into  a 
machine  moved,  like  the  automaton  by  the  hand  of  the 
master,  by  external  power,  instead  of  the  mainspring 
within  the  individual  self. 

One  of  the  leading  elders  of  the  Shaker  community  at 


SOCIALISMS.  199 

New  Lebanon,  distinguished  for  his  intelligence  and 
honesty,  had  adopted  the  correct  view  of  the  operation  of 
Socialism,  when  he  said,  that  he  had  always  frankly  told 
the  several  delegations  of  Socialists  who  had  visited  New 
Lebanon  to  inquire  into  the  Shaker  system,  that  theirs 
would  not  work,  wanting  the  vital  element  of  religious 
motive  and  spirit.  That  celibacy  also  would  be  essential, 
as  a  man  with  a  wife  and  children  could  never  renounce 
that  selfishness,  that  preference  for  his  own,  which  would  be 
fatal  to  any  living  in  common.*  The  Shaker  elder  is  right 
in  his  understanding  of  the  inevitable  tendency  of  human 
nature  to  individuality  when  in  families ;  but  wrong  in 
endeavoring  to  run  counter  in  his  own  practice  to  the 
natural  current,  by  setting  aside  the  institution  of  family. 
He  should  rather  fall  into  the  order  of  nature,  and  seek, 
by  giving  a  proper  direction  to  the  natural  and  inevitable, 
to  improve  the  condition  of  his  kind. 

When  association  degenerates  into  the  worse  forms  of 
Socialism,  when  it  requires  a  fixed  equal  distribution  of 
property,  the  investment  of  all  the  agents  of  wealth  in  the 
state  or  community,  denies  the  right  of  every  person — 
with  freedom  of  competition  open  to  all — to  attain  of  the 
world's  goods  to  the  extent  of  his  ability,  usefully  employ- 
ed, adopts  and  exercises  the  mental  and  social  compression 
before  deprecated,  it  not  only  requires  what  is  as  imprac- 
ticable as  undesirable,  but  the  theories,  subversive  of  all 
that  the  human  soul  holds  sacred,  go  further,  and  question 
the  propriety  of  continuing  any  of  the  existing  social 
institutions,  condemn  that  of  marriage  and  religion,  and  in 
the  words  of  a  leading  socialist,  "  the  immortality  of  the 

*  New  York  Herald,  Sept.  1848. 


200  SOCIAL  REMEDIES. 

soul,  even,  is  generally  rejected,  and  absolute  atheism  is 
not  uncommon."  Surely  insanity  could  no  further  go.* 

In  abolishing  the  various  sorts  of  protection  for  lordling, 
prelate,  and  capital,  it  were  well  for  all  nations  carefully 
to  avoid  oscillation  of  the  pendulum  to  the  opposite  side, 
and  by  establishing  the  protection  in  another  form,  as  was 
recently  attempted  in  the  proposed  system  of  the  national 
workshops  in  France,  under  the  claim  to  the  Right  to 
Labor,  before  noticed,  perpetuate  its  existence,  instead  of 
strangling  the  serpent  that  with  all  its  wily  strength  seizes 
upon  some  new  member  of  the  body  politic  whenever  it  is 
dislodged  from  its  previous  hold. 

Physics  are  being  turned  by  physical  power  to  practical 
uses,  with  a  rapidity  of  invention  and  promptitude  of 
application  that  excite  the  universal  wonder  of  mankind, 

*  While  these  pages  were  going  through  the  press,  a  letter  was 
received  by  the  author  from  a  gentleman  who  was  well  acquainted 
with  the  "  Brook  Farm"  experimental  association,  near  Boston,  and 
had  been  a  talented  and  zealous  projector  of  the  "  Skeneatlas  com- 
munity" in  Western  New  York,  respecting  which  he  says:  "The 
cause  of  the  failure  was  undoubtedly  a  combination  of  knaves  and 
fools.  The  former  desiring  man-worship,  and  the  latter  thinking  it 
necessary  and  proper  to  worship  some  great  man.  Worship,  and 
the  desire  to  be  worshipped,  seemed  to  be  the  leading  elements  of 
disturbance.  Those  who  thought  it  unbecoming  a  reformer  to  worship 
a  Deity,  were  the  most  devout  worshippers  of  the  tallest  man  in 
their  company,  and  therein  exhibited  more  bigotry,  blindness,  into- 
lerance, and  persecution  towards  dissenters,  than  any  heathen  or 
Christian  I  have  ever  seen  or  read  of.  My  opinion  is,  that  we  have 
not  arrived  at  such  a  point  of  intellectual  advancement  generally, 
as  to  render  the  prospects  of  success  in  any  kind  of  association  very 
flattering.  In  fact,  I  do  not  think  the  present  order  and  arrange- 
ments of  society  can  be  much  improved  with  any  combination  of 
the  elements  we  now  have." 


SOCIALISMS.  201 

for  the  mighty  results  accomplished  in  proportion  to  effort. 
These  results,  in  their  turn,  assuming  the  attitude  of 
causes,  are  all  effecting  those  physical  and  moral  ame- 
liorations that  constitute  what  is  termed  the  progress  of 
the  age.  Of  these,  increasing  security  for  persons  and 
property  is  in  turn  promoting  production,  the  increase  of 
capital  and  well-being  of  consumers.  The  assurance 
principle,  not  the  least  effective  of  the  improving  agencies, 
is  being  more  extensively  developed,  and  furnishes  the 
thermometrical  indication  of  a  more  widely  diffused  and 
permanent  security,  evidences  of  the  moral  progress  of 
mankind.  Insurance  encourages  the  employment  in  pro- 
ductive industry  of  capital  that  would  otherwise  lie  idle  in 
hoarded  security.  The  principle  is  fraught  with  benefit, 
beyond  the  power  of  human  calculation,  to  all  industry 
and  its  results.  Man  will  be  industrious  and  endure  any 
degree  of  privation,  if  he  but  have  assurance  that  the 
result  of  his  efforts  will,  beyond  the  risks  of  chance,  enure 
to  his  own  enjoyment.  But,  leave  him  in  uncertainty  as 
to  his  retention  of  such  result,  and  his  energies  slacken, 
his  love  of  ease  predominates,  and  he  catches  at  the  gilded 
toy  of  the  moment,  unmindful  of  the  future,  and  heedless 
of  improvement. 

It  is  by  competition  that  all  those  improvements  in 
physics  are  made  serviceable  to  mankind.  The  true 
social  formula  is  Freedom,  Competition,  Property. 

There  are  great  minds,  and  humanity-loving  hearts, 
who  style  themselves  Associationists,  and  hope  to  redress  the 
evils  now  oppressing  mankind.  In  free  trade  is  projected 
an  association  of  the  nations,  a  world  wide  association 
wherein  each  contributes  of  its  own  resources  to  the 
general  wealth,  each  imparts  of  its  own  peculiar  blessings 
9* 


202  SOCIAL  REMEDIES. 

for  the  benefit  of  the  others  ;  wherein  man  imbued  with  a 
sentiment  that  sleeplessly  urges  him  to  unremitting  action, 
prompting  him  to  compete,  produce,  exchange,  acquire, 
enjoy,  is  seen  to  be  operating  under  that  law  whereby  the 
producer,  laboring  for  self  against  competition,  benefits  the 
consuming  numbers  by  the  operation,  never  wavering,  of 
the  natural  laws  of  Providence,  unrestricted  by  the  un- 
natural regulations  conceived  by  men, — abundance  of  non- 
restricted  production  as  opposed  to  protection-created 
scarcity,  affording  much  of  the  general  amelioration 
humanity  demands. 

I  would  not  assert  that  this  one  of  the  progressive  ideas 
of  the  age  will  solve  the  entire  problem  of  humanity. 
As  a  variety  of  causes  contribute  to  mixed  motives, 
from  which  in  turn  originate  the  actions  of  man,  so, 
many  measures,  operating  diversely,  yet  with  a  ten- 
dency towards  analogous  ends,  are  necessary  to  ac- 
complish a  great  work  of  progressive  amelioration. 
But  some  of  the  theories  that  have  been  evolved  in  the  old 
world  seem  to  promise  no  better  results  than  the  sufferings 
under  the  present  state  of  protected  inequality.  They 
appear  to  be  but  an  extension  of  the  protective  system. 
Free  trade  presents  itself  free  from  these  objections,  a  true 
engine  of  liberty.  Whatever  other  measures  may  be 
necessary,  without  free  trade,  they  will  in  great  measure 
fail  of  their  object.  It  is  necessary,  first  of  all,  to  procure 
men  necessaries,  and  they  cannot  be  found  in  restriction. 
Education  is  incompatible  with  indigence.  Man  is  not  in  a 
condition  to  listen  appreciatively  to  doctrines  of  morality, 
nor  to  cherish  the  disposition  to  practise  religious  precepts, 
until  his  more  material  wants  are  satisfied.  Demoraliza- 
tion, the  filth  of  the  mind,  accompanies  always  the  filthy 


SOCIALISBIS.  203 

habits  of  living  generated  by  extreme  want.  Good  is 
more  powerful  than  evil :  Providence  has  evidently 
designed  by  the  exchange  of  products  to  promote  union 
among  men  ;  and  it  is  the  mission  of  commercial  freedom 
to  aid  in  diffusing  these  principles  of  liberty,  fraternity, 
equality,  which  Christianity  has  developed. 

After  a  careful  examination  of  the  prohibitory,  protec- 
tive system,  looking  upon  it  with  the  eye  of  reason,  unbi- 
assed by  interest  or  the  influence  of  partisan  sentiment,  its 
horrors  are  fully  comprehended,  and,  as  it  rises  up  in  all 
its  forms,  reeking  with  the  blood  of  labor,  for  ages  sweated 
forth  at  every  pore,  we  shun  it,  as  the  baleful  evil  of  the 
world's  happiness.  We  see  that  prohibition  violates  the 
legitimate  order  of  society  ;  that  it  encroaches  upon  man's 
freedom,  in  preventing  him  from  choosing  his  channel  of 
labor,  whilst  it  constrains  him  to  give  a  false  direction  to 
his  efforts  ;  that  it  injures  the  public  prosperity,  in  forcing 
the  industrial  efforts  least  productive,  to  the  prejudice  of 
those  more  fruitful  ;  that  it  encroaches  upon  political  and 
civil  equality,  in  subjecting  all  to  a  tax  for  the  benefit  of 
a  few  ;  that  it  compromises  peaceful  relations  between 
countries,  and  misdirects  the  intentions  of  providence,  who, 
in  furnishing  an  infinite  variety  of  climates  and  ap- 
titudes, has  indicated  the  necessity  for  intercommuni- 
cation, and  the  cultivation  of  universal  brotherhood. 
That  its  results  arrive  at  the  reverse  of  that  progressive 
excellence  which  the  improvements  in  the  natural  sciences, 
the  intellectual  developments,  the  spread  of  Christianity, 
the  defiant  earnestness  with  which  men  are  seeking  after 
social  ameliorations,  all  prove  to  be  the  general  tenor  of 
the  age. 

It  has  been  demonstrated,  that  it  is  impossible   for  na- 


204  SOCIAL  REMEDIES. 

tions  to  practise  the  protective  system  with  utility  :  Free 
trade  is,  then,  a  consequence  of  this  impossibility.  This 
age  is  characterized  by  an  earnest  seeking  after  utility,  a 
zealous  laboring  to  find  the  truth,  that  must  eventually 
succeed  in  bringing  it  into  practice.  A  Cobden,  a  Bow- 
ring,  a  Bright  in  England  ;  a  De  Brouckere,  a  Lehardy  de 
Beaulieu,  a  Wolowski  on  the  continent  of  Europe  ;  and  a 
host  of  other  able  spirits,  are  laboring  with  a  determined 
zeal,  that  is  generating  a  world-pervading  sentiment, 
which  must  sooner  or  later  achieve  a  cosmopolitan  result. 
In  the  old  world,  sick  even  unto  death  with  the  opera- 
tion  of  measures  directly  opposite  in  their  effects  from  free 
trade,  society  will  find  it  an  efficient  remedial  agent ; 
while  here,  in  America,  it  is  certainly  one  thing  necessary 
to  the  completeness  of  the  political  and  social  fabric. 

Cheapness,  cheap  food,  cheap  clothing,  cheap  travelling, 
cheap  postage,  all  forms  of  cheapness,  constituting  the 
path  of  progress  along  which  the  world  must  travel,  are 
considered  agencies  in  ameliorating  the  condition  of  man- 
kind,  and  are  earnestly  sought  after  in  every  variety  of 
form  and  manner  the  ingenuity  of  man  can  devise.  Ne- 
vertheless, a  conservative  influence,  which  has  its  uses  and 
abuses,  often  operates  to  delay  the  adoption  of  measures 
adapted  to  the  end  of  cheapness  long  after  the  knowledge 
of  their  tendency  has  been  very  generally  diffused.  Fi- 
nally, this  influence  retires  before  the  force  of  truth,  ope- 
rating slowly  but  certainly  upon  public  sentiment.  Free 
trade  is  one  of  those  agencies,  and  is  therefore,  like  free 
labor,  though  long  in  making  its  way,  inevitable.  It  is  a 
true  instrument  of  progress. 

Progress  is  the  amelioration  of  our  social  existence  in  its 
combined  organisms  of  the  intellectual,  naoral,  and  phy- 


FREE  LABOR.  205 

sical.  These  ameliorations  have  ever  been  alike  gradual 
and  inevitable.  Upon  this  subject  of  progress  and  the  ame- 
lioration of  the  poorer  classes,  there  is  far  too  much  of 
vapid  sentimentalism  and  fanatic  demagogueism  lisped  and 
ranted  forth  by  hosts  of  self-styled  reformers  of  all  dyes. 
It  is  the  dogday  mania  of  the  time,  though  the  natural  ex- 
cess  to  which,  in  some  organisms,  the  humanizing  spirit 
extends  itself;  and  were  but  the  tithe  of  all  their  schemes 
for  social  reform  put  in  practice,  the  world  would  be  re- 
formed past  reformation.  A  reform  that  would  reverse 
the  order  that  prevails  for  such  confusion  as  would  reign 
where  anarchy  had  sway,  and  rights,  unchained  from 
duties,  were  living  in  unnatural  excess.  Poor  progress, 
perched  upon  the  wild  steed's  crest,  sent  forth  upon  a 
steeple  chase,  would  soon  achieve  a  sad  break-neck  ca- 
tastrophe. 

The  subject  of  ameliorating  the  condition  of  the  poor 
whites  is  not  the  only  one  upon  which  unreasoning  senti- 
ment and  a  blind  zeal  expend  themselves.  The  negro  race 
is  dwelling  among  us  in  bondage,  and  "  lo  the  poor  Indian" 
is  being  slowly  and  surely  exterminated.  The  existence 
of  the  former  on  terms  of  social  equality  and  of  physical 
and  moral  amalgamation  with  the  Caucasian  race,  is  as 
impossible  under  the  present  organization  of  the  negro  race 
as  is  that  of  the  latter.  Ethnology  teaches  us  to  hope  for 
an  improved  craniological  and  epidermic  organization  of 
the  inferior  races.  Until  that  far  distant  time,  whosoever 
of  them  shall  not  be  dwelling  in  the  regions  and  under  in- 
stitutions adapted  to  their  organism,  will  be  occupying  an 
inferior  social  position,  or  will  have  disappeared  from  ex- 
istence. The  extermination  of  inferior  and  substitution  in 
their  places  of  superior  races,  is  but  a  step  in  the  march  of 


206  SOCIAL  REMEDIES. 

progress,  in  whose  calendar  the  ages  count  but  as  days,  and 
with  whom  the  races  are  but  as  types  of  a  degree  in  the 
condition  of  mankind.  The  sentimentality  that  mourns 
over  the  disappearance  of  an  inferior  race,  omitting  to  re- 
joice that  its  place  is  supplied  by  a  superior,  would  forget 
one  of  the  means  by  which  Providence  works  improve- 
ment in  mankind.  The  advance  in  the  condition  of  man 
has  been  heretofore  effected,  by  both  this  method  and  that 
of  sustaining  the  existence  of  the  race,  and  effecting  its 
improvement.  If  the  education  and  amalgamation  of  the 
inferior  race  is  practicable,  and  it  can,  in  the  progress  of 
civilization,  by  these  means,  be  raised  to  a  level  with  the 
superior,  it  will  be  effected  when  the  races  have  dwelt  a 
sufficiently  long  time  in  contact.  If  impracticable,  the 
inferior  race  will  have  sought  other  regions,  or  will  have 
been  exterminated,  having  occupied,  while  in  contact,  a 
position  of  savage  independence,  or,  while  the  social  con- 
nexion endured,  lived  in  the  condition  of  servitude,  volun- 
tary or  involuntary. 

The  involuntary  servitude  is  the  evil  so  much  lamented, 
and  with  reason.  Being  inconsistent  with  the  genius  of 
humanity,  and  with  the  spirit  of  that  liberty  of  which 
Christianity  is  the  pabulum,  it  should,  whenever  practica- 
ble, be  abrogated.  Then  the  field  will  be  properly  open 
for  the  race  to  struggle  after  equality  with  the  superior,  a 
struggle  that  will  end  either  in  its  attainment,  after  a  pro- 
tracted term  of  that  normal  state  where  improvidence  re- 
quires the  constant  superintendence  of  the  teachers,  or  in 
peaceful  disappearance  as  a  numerous  race  from  the  soil 
occupied  by  the  Caucasian.  The  last  result  would  proba- 
bly follow  fast  upon,  or  occur  simultaneously  with  the 
abrogation.  The  very  fact  of  their  normal  condition  of 


FREE  LABOR.  207 

improvidence  is  to  delay  the  movements  until  they  can  be 
undertaken  jointly. 

Hence  there  are  considerations  that  mitigate  our  horror 
of  the  protraction  of  this  system.  The  race  will  be  bet- 
ter fitted  to  work  their  own  improvement,  after  a  long  term 
of  servitude  here,  and  of  being  subjected  to  the  influence 
of  our  institutions,  working  their  way,  as  it  were,  along 
an  under  current  of  progress,  that  is  keeping  its  certain  way 
with  our  own,  than  they  would  have  been  had  no  other  than 
African  suns  ever  shone  upon  them,  no  other  than  native 
African  influences  ever  surrounded  them.  There  they 
were  and  are,  in  the  savage  state,  not  having  attained  to 
the  secondary  stage,  the  pastoral.  Transplanted  hence, 
they  land  upon  the  shores  of  Africa,  fitted  for  the  third 
condition  of  man,  tillers  of  the  soil  ;  ready  to  labor  in  the 
development  and  improvement  of  the  African  continent. 
The  republic  of  Liberia  will  doubtless  prove  a  more  effi- 
cient germ  of  civilization  than  the  jungles  of  the  Bush- 
men. 

Above  all  things  the  change  of  servitude  should  be 
gradual.  There  are  those  who  would  ask, — is  it  practica- 
ble and  desirable  ?  After  emancipation  their  position 
would  still  be  that  of  servitude — if  of  any  service  at  all — 
and  then  their  services  would  be  less  efficiently  rendered 
than  before.  Production  of  those  staples  their  labor  cul- 
tivates could  not  be  effected  as  cheaply  as  before ;  and 
whatever  is  detrimental  to  the  interest  of  employers,  is 
equally  injurious  to  the  employed.  Would  not  their  moral 
progress  be  as  great  under  the  present  relation  of  master 
and  slave  (planters  now  pay  clergymen  to  preach  the 
gospel  to  their  slaves,  and  exhort  them  themselves),  as  in 
one  of  voluntary  servitude,  where  their  efforts  would  not  be 


208  SOCIAL  REMEDIES. 

as  indispensable  as  now  to  the  producers,  and  when,  un- 
educated, and  with  improvident  habits,  they  would  fall  into 
a  state  of  extreme  poverty,  of  non-producing  want  and 
moral  degradation ;  a  population  of  paupers  wanting  caste 
in  every  sense  of  the  word,  festering  in  the  midst  of  the 
social  body  ? 

These  would  be  no  unmeaning  questions,  and  involve  a 
social  problem  replete  with  difficulties  if  too  hastily 
tampered  with.  Notwithstanding  the  fact  that  they  are 
not  by  any  means  so  incontrovertible  as  to  require  our 
assent  to  the  permanency  of  their  action,  in  view  of  a 
practicable  system,  before  referred  to,  of  combined  com- 
pensation and  colonization  co-operating  under  the  influ- 
ence of  those  natural,  physical,  and  moral  causes  that 
will  gradually  and  progressively  develope  themselves,  and 
which  have  already  changed  slave  to  free  states,  and  will 
repeat  the  process  in  regions  further  south.*  Notwith- 
standing all  this,  those  who  would  ask  these  questions 
would  have  with  them  more  than  a  show  of  reason  ;  and 
they  would  be  those  who  have  a  weight  of  rights  to  cast 
into  the  scale,  requiring  that  the  initiatory  should  be  taken 
by  themselves.  These  opinions  and  rights  are  held  by 
persons  who  by  education  and  custom  regard  the  matter 
in  a  different  light  from  that  in  which  the  ready  aggressors 
view  it ;  and  the  leaven  of  moral  progression  whose 
advance  is  accomplishing  all  meliorations  must  unfold 
itself  in  their  consciousness,  prompting  the  necessary 
action  on  the  part  of  those  holding  such  opinions  and 

*  Already  a  movement  is  making  in  Kentucky  to  effect  the  introduc- 
tion of  a  clause  into  the  Constitution  of  that  State,  providing  for  gradual 
emancipation. 


FREE  LABOR.  209 

rights,  which  should  not  be  outraged  ;  to  their  having 
been  so,  is  owing  the  retardation  of  the  emancipation  that 
will  yet  come.  I  cannot  help  indulging  with  the  reviewer 
in  the  cynical  belief  that  "  pure,  unadulterated  benevo- 
lence is  almost  as  dangerous  an  agent  to  tamper  with  as 
gun-cotton,  unless  it  be  freely  diluted  with  the  less  tran- 
scendent qualities  of  practical  knowledge  and  common 
sense."  I  should  regret  to  see  slavery  suddenly  abolished. 
It  would  be  still  more  painful  to  believe  that  it  is  never  to 
be.  But  reformers  make  two  mistakes  ;  they  insist  upon 
only  one  method  of  progress  being  recognised,  and  they 
wish  the  work  of  generations  to  be  accomplished  in  a  day, 
leaving  nothing  to  the  providence  of  God,  and  the  labors 
of  that  efficient  worker,  father  Time. 

Notwithstanding  what  Burke  in  his  Reflections  calls 
mind  conspiring  with  mind,  is,  under  our  institutions  and 
at  the  advanced  intellectual  and  moral  position  attained  to, 
effectively  favoring  improvements,  the  importance  of  the 
social  and  political  changes  agitating  the  minds  of  men 
demands  a  careful  discrimination  between  measures  of 
reform,  and  the  cautious  avoidance  of  hastily  making 
innovations  in  existing  political  institutions  that  was 
appreciated  as  long  ago  as  the  time  of  Aristotle.  In 
noticing  the  analogical  reasoning  that  improvements  in 
government  can  be  introduced  as  readily  as  those  in  the 
arts,  he  says  :  "  the  example  drawn  from  the  arts  is  a 
fallacy  ;  for  there  is  no  analogy  between  innovating  in  an 
art,  and  innovating  in  a  law  :  inasmuch  as  a  law  has  no 
power  of  inducing  obedience  unless  by  habit ;  and  this 
can  only  be  effected  by  lapse  of  time ;  so  that  lightly  to 
exchange  the  existing  laws  for  other  and  new  ones  is  to 
enfeeble  the  force  of  the  law."  To  the  important  changes 


210  SOCIAL  REMEDIES. 

proposed  by  enthusiasts  and  reformers,  is  referable  all  of 
the  caution  inculcated  by  the  philosopher  of  ancient  Greece. 
The  agitations  are  calculated  to  promote  disunion,  which 
is  dishonor,  destruction,  and  defeat ;  whereas  union  is 
greatness,  and  glory,  and  all  good. 

Not  only  in  view  of  the  principle  of  constitutional 
rights  is  the  conservative  caution  felt  to  be  especially  ne- 
cessary, but  also  when  it  is  remembered,  that  the  produc- 
tion of  our  great  exporting  staples  is  wound  up  in  the  ex- 
isting institution  ;  and  the  importance  of  a  caution  against 
the  premature  tampering  of  legislation  is  seen  in  its  full 
force  when  regarding  the  effects  of  emancipation  in  the 
British  West  Indies,  where  it  has  resulted  in  the  wreck  of 
capital,  in  the  withering  of  resources,  natural  and  ac- 
quired, and  the  subversion  of  social  order.  England 
offers,  in  the  sermonizing  of  her  journalists,  reviewers,  and 
bookmakers,  a  stringent  conservatism,  when  considering 
the  political  movements  upon  the  European  continent,  a 
sensible  view  of  some  of  the  social  theories  agitated  there, 
but  fails  altogether  in  the  consistent  application  of  the 
same  conservatism,  and  rushes  wildly  into  ultra  gun- 
cotton  radicalism,  when  her  critical  eyes  are  turned 
towards  the  "  peculiar  institution"  of  this  continent.  So 
madly  that,  leaping  the  continental  shores,  it  sweeps  ad- 
jacent islands,  to  her  own  injury  and  the  especial  ruin  of 
those  unfortunates,  her  island  subjects,  white  and  black. 

When  we  extend  our  view  it  will  be  observed,  that  all 
necessary  conservatism  exists  at  large,  and  because  it  does 
there  will  not  be  the  abrupt  action,  by  those  within  whose 
province  it  lies,  affecting  the  peculiar  institution  ;  nor,  on 
the  other  hand,  because  the  conservatism  does  exist,  will 
there  be  a  withholding  generally  of  the  improvements  de- 


PROGRESS.  211 

manded  by  humanity  when  the  season  of  fitness  shall 
arrive. 

Such  is  the  march  of  social  progress  humanity  ward,  that 
no  territory  contiguous  to  the  United  States,  not  already 
impregnated  with  the  "  evil,"  will  voluntarily  assume  it, 
to  be  incorporated  into  the  institutions,  under  which  ad- 
mission is  to  be  sought  into  the  federal  union.  If  impreg- 
nated territory  knock  at  the  door  of  the  Union  should  it 
not  be  so  admitted,  and  so  continue  until,  at  some  subse- 
quent period,  the  new  state  shall  voluntarily  follow  the  ex- 
ample set  it  by  the  previous  action  of  others  lying  in 
higher  latitudes  ?  Should  it  not,  when  we  consider  that 
under  no  institutions  will  a  fitting  emancipation,  one  that 
shall  have  prepared  the  subject  for  the  advance,  and  all 
blessings,  be  sooner  wrought  than  under  the  moral  pro- 
gression born  of  our  own  ? 

The  enthusiasts  and  reformers  alluded  to  would  fail  to 
preserve  the  consecutive  links  by  which  progress,  the  edu- 
cation of  humanity,  advances  ;  an  omission  as  detrimental 
as  would  be  that  in  the  education  of  the  individual  man, 
which  would  overlook  either  of  the  rudiments  necessary 
to  making  a  sure  improvement  in  knowledge.  In  pro- 
gress the  necessity  is  a  natural  and  certain  advance  ;  one 
unlike  the  sudden  leap  with  which  socialism  would  re- 
cently have  cleared,  not  only  the  restraining  bounds  of 
monarchy,  but  would  have  leaped  the  barriers  that  divine 
law  and  Christian  precept  have  prescribed  to  anarchy,  and 
spread  confusion  and  disorder  throughout  society.  For- 
getting that  there  is  an  interval  between  seed-time  and 
harvest,  they  would  put  in  the  sickle  before  the  grain  is 
ripe. 

To  be  lasting,  all  changes  in  society   must  be  gradual. 


212  SOCIAL  REMEDIES. 

The  general  mind  must,  by  many  stages,  be  educated  to 
the  degree  of  intelligence  necessary  for  acting  in  the  im- 
proved condition,  and  then  the  change  will  inevitably 
come.  Progress  walks,  it  never  leaps.  Poor  put-upon 
and  patient  Progress  !  with  thy  name  so  often  called  upon 
to  sanctify  the  follies  fain  would  jump  towards  a  lofty  end. 
What  wonder  though  that  jerks  and  leaps  are  forced  upon 
thy  steady  gait,  when  we  consider  that  thy  latest  lengthen- 
ed stride  was  made  by  the  remorseless  application  of  gal- 
vanic batteries  ! 

Progress  is  evidently  not  over  hasty  to  hurry  on  its 
way,  when  we  see  the  progressive  action  of  the  Sultan,  in 
seeing  an  ambassador  to  the  Pope,  counterbalanced  by 
the  conservative  movement  of  the  petitioners  of  Exeter, 
England,  who  beg  that  Parliament  will  not  receive  an 
ambassador  from  the  papal  power.  The  day  that  wit- 
nesses an  advance  made  by  Islamism  in  extending  its  hand 
in  amicable  greeting  to  Christianity,  sees  also  the  retro- 
gressive movement  of  Christianity,  which,  in  the  one 
church,  is  opposing  the  adoption  of  friendly  relations  with 
its  sister  church.  The  chronology  of  progress  also  re- 
cords, on  the  part  of  the  present  year,  1848,  that  Islamism 
and  Christianity,  mutually  inspired  by  the  progressive 
spirit  of  humanity,  have  jointly  extended  the  hand  of 
tolerance  to  a  third  member  of  the  human  family.  Tho 
Sultan  of  Turkey  grants  permission  to  the  Jews  to  rebuild 
the  Temple  of  Jerusalem,  and  the  Papal  government 
emancipates  the  Jews  of  Rome  from  the  civil  disabilities 
that  for  centuries  have  bound  them.  But  in  a  scale  oppo- 
site to  these  progressive  movements  is  also  cast  a  weight  of 
conservation.  This  is  to  be  observed  in  the  action  of  the 
Puseyite  members  of  a  clerical  club  at  Oxford,  England, 


PROGRESS.  213  . 

learned  divines  all,  who  have  recently  issued  a  document 
setting  forth  the  rules  by  which  their  principles  shall  be 
regulated.  In  this  document  is  declared  the  divine  right 
of  kings  ;  indissoluble  union  between  church  and  state ; 
that  no  right  exists  of  private  judgment  in  matters  of  re- 
ligion ;  that  the  education  of  the  lower  classes  is  a  public 
evil ;  that  they  should  exercise  no  voice  in  the  choice  of 
representatives  ;  and  that  those  upon  whom  they  are  de- 
pendent are  justified  in  exercising  their  influence  over 
them  in  matters  of  church  and  state  ! ! 

Again,  while  Europe  is  moving  a  step  in  advance,  that 
promises  to  merge  the  kingdoms  into  republics,  cheering 
us  with  bright  hopes  for  the  future  condition  of  man  as  the 
constituent  of  democratized  institutions,  what  reactionary 
steps  are  witnessed !  What  cloud  is  that  which  darkens 
the  light  of  Christianity,  and,  raven-like,  descends  to  over- 
canopy  the  form  of  Liberty  ?  What  is  that  like  a  dark 
pall  seen  settling  down  to  wrap  its  mournful  folds  about 
the  bright  genius  of  humanity,  and  shroud  it  from  the 
sight.  Behold  it  pouring  forth  torrents  of  blood,  to  over- 
whelm, with  black  destruction,  the  fabric  of  Christianity 
and  Freedom,  which  has  been  the  proud  boast  of  the 
nineteenth  century.  The  troops  of  Austria's  Emperor, 
like  famished  wolves  upon  the  scent,  are  hunting  down  the 
herds  of  Austria's  people.  Throughout  Vienna,  fair 
city  of  the  Danube,  in  all  her  streets  and  homes,  the 
horrid  butchery  has  left  its  mark  in  heaped  up  tracks  of 
slaughter,  encumbered  with  the  mutilated  forms  of  men, 
women,  and  children,  flayed,  dismembered,  their  eyes 
burned  in  the  sockets,  and  flesh  cut  piecemeal  from  the 
living  bodies  !  Hundreds  of  burning  houses  illuminate  the 
scene,  their  flames  replenished  with  the  dead  and  living  ! 


•214  SOCIAL  REMEDIES. 

Humanity  sickens  at  the  sight,  and  disowns  the  civiliza- 
tion that  marks  the  epoch. 

Who  will  say  that  Progress  leaps  ?  Yet  Progress  does 
advance  along  its  steady  way,  and  the  bloody  deluge 
which  flooded  the  human  shambles  of  Vienna,  has  watered 
a  soil  whence  shall  spring  a  plentiful  harvest  of  free  insti- 
tutions. Also,  enlightened,  Christian,  pattern  England 
will  yet  come  up  with  benighted,  barbarous,  Mahommedan 
Turkey,  in  liberality  of  religious  toleration,  in  the  ameli- 
orative spirit  for  which  humanity  and  Christianity  are 
piteously  beseeching  with  tremulous  knockings  at  the 
portals  of  her  proud  and  hard  heart.  I  believe  it,  for  I 
have  faith  in  the  general  march  of  Progress,  the  England 
and  Austria  of  yesterday  and  to-day  to  the  contrary  not- 
withstanding. 

Looking  back  upon  the  moral  events  of  the  past,  we  are 
sensible  of  a  guarantee  for  a  continued  advance.  We  see 
behind  us  the  attainment  of  universal  suffrage,  the  organi- 
zation of  popular  education,  the  abolition  of  imprisonment 
for  debt,  of  slavery,  and  of  capital  punishment.  From 
the  time  when  the  Norman,  looking  upon  arms  and  robbery 
as  the  only  test  of  respectability  and  ground  of  right, 
regarded  with  supreme  contempt  the  sturdy  Saxon  who 
toiled  for  bread,  to  this  day,  when  the  year  1848  is  closing 
upon  us,  long  to  be  remembered  as  the  year  of  revolutions 
and  of  gold,  political  and  moral  progress  has  made  its 
certain  way.  Although,  like  that  of  the  hand  of  the  time- 
recording  clock,  its  movements  may  be  imperceptible, 
whenever  we  look  at  the  hours  the  ages  have  marked  upon 
the  dial  of  humanity  we  may  note  the  advance  achieved 
by  progress. 

Meek,  unpretending  Progress  !  whose  loved  and   most 


PROGRESS.  215 

successful  action  is  in  the  daily  performance  and  practice 
of  the  simplest  duties  ;  those  that,  not  stretching  far  away 
in  zealous  interference  with  another's  rights,  lie  nearest, 
and  are  all  embraced  within  the  few  recorded  words  the 
Saviour  left  us.  Not  in  Icarien  impracticabilities ;  not  in 
theories  most  intricate  of  brain-racked  birth,  each  grasping 
with  strained  effort  after  metaphisms  of  clairvoyant  or  the 
spiritual  school,  but  in  the  simple  practice  of  the  best 
known  duties,  under  nature's  plainest  laws,  that  govern 
not  too  much — in  earnest,  steady  labor  in  such  duty- 
practice  of  uprightness  and  industry,  lies  the  travel  on  the 
path  of  Progress. 

What  in  the  language  of  political  economy  is  called  the 
stationary  state,  is  ever  like  to-morrow,  apparently  attaina- 
ble, yet  ever  in  advance  ;  and  as  the  enjoyments,  the 
physical  and  moral  wealth  of  the  collective  world,  are 
greater  to-day  than  yesterday,  so  do  the  discoveries  and 
developments  constantly  taking  place  in  the  arcana  of 
physics,  together  with  the  spread  of  education  and  all  free 
facilities,  seem  constantly  to  remove  to  a  greater  distance 
the  limit  of  Industrial  Progress. 

And  in  such  wise  of  moral  and  industrial  action,  in  the 
meek  and  industrial  progression,  we  will  indulge  the  hope 
of  a  healthful  progress  through  the  throwing  open  of  all 
the  avenues  of  industry,  not  in  a  partial,  but  in  a  general 
and  comprehensive  sense  that  shall  embrace  the  entire 
world  with  all  its  capacities,  physical  and  moral,  both 
national  and  individual ;  in  short,  the  free  acceptance  of 
God's  gifts  by  all  the  nations  of  democracies  through  free 
exchange.  This  is  a  communism  we  should  seek  ;  where 
enterprise  and  industry  are  untrammelled  in  the  midst  of 
abundant  production,  and  none  are  paupers  who  will  work 
in  the  free  and  spreading  fields  of  labor  for  the  gaping 


216  SOCIAL  REMEDIES. 

markets  of  the  world.  This  is  liberty.  This  is  justice  to 
all ;  and  justice  is  an  element  of  Christianity  that  must 
play  its  part  in  the  development  of  the  science  of  industry, 
before  the  rules  of  that  science  can  work  out  results  that 
will  yield  assurance  of  correctness,  on  application  of  the 
proof  of  universal  brotherhood. 

There  can  never  be  too  much  of  cheapness  for  man. 
His  wants  grow  with  that  supplies  them.  As  long  as  men 
live  on  earth  they  will  call  for  more,  still  more  of  nourish- 
ment from  the  bosom  of  the  common  mother.  Transport- 
ing ourselves  to  some  far  distant  period  in  coming  time — 
Then,  with  a  world  sufficiently  peopled  to  develope  its 
varied  resources,  yet  not  too  densely  crowded,  when  all 
organisms  shall  be  improved  far  beyond  their  present  con- 
dition ;  when  each  family  shall  enjoy  the  various  comforts 
of  the  table,  the  elegant  garments,  the  bath,  and  all  the 
appliances  of  the  wealthy  few  of  this  age ;  when  each 
individual  may  exercise  a  refined  taste  in  daily  enjoy- 
ment of  the  concert,  and  all  the  works  of  highest  art,  and 
educated  mind  extends  further  and  wider  its  dominion 
over  sense  and  matter,  who  shall  say  the  end  is  yet  ? 
Labor,  the  industrial  arts  its  right  hand,  and  freedom  the 
vital  element  it  breathes,  in  the  plenitude  of  its  power 
striking  out  new  fields  of  action,  calling  to  its  aid  now  un- 
discovered and  yet  subtler  elements,  will  then  develope  of 
earth's  known  and  yet  unknown  treasures,  richer  stores  : 
then  mould  them  all  to  newer  forms,  more  elegant,  until 
the  refined  and  more  refined  material  combines  in  all  its 
intimate  connexion  with  the  immaterial  of  man's  nature, 
to  elevate  the  human  being  to  a  loftier  state,  where,  looking 
back  on  this,  he  will  regard  it  as  he  views  the  barbarism 
of  yore. 

And  this  more  immaterial  part,  will  it  not,  with  all  the 


PROGRESS.  217 

march  of  intelligence,  of  science,  letters,  morals,  CHRIS- 
TIANITY, have  learned  to  joy  in  high  appreciation  of  the 
moral  beautify!,  and  have  kept  its  even  pace  in  the  pro- 
gressive  order  of  the  world  ?  It  will — when  labor  walks 
the  earth,  a  God  in  dignity  and  power ;  and  every  man 
shall  be  a  sovereign  truly  in  his  power  and  wealth,  and  one 
of  God's  own  chosen  in  knowledge  and  all  moral  excel- 
lence.  Christ  furnished  us  the  type  of  poverty  rising  to 
the  God  in  heavenward  Ascension ;  and  we  will  cherish 
faith  in  man,  created  image  of  Divinity,  advancing  ever 
with  the  stride  of  Progress  upon  this  teeming,  fruitful 
footstool ! 

Is  not  this  meanwhile  a  pleasant  ideal  ?     And  is  it  not 
instructive  as  well  ? 


1 .1  t.  »;  .v  ;: 
•    MVEKSITY  OK 

CALIFORNIA 


XXII. 

WHAT    DUTY    PROTE  CTIVE?— INDIRECT 
AND  DIRECT  TAXATION— CONCLUSION. 

THE  nature  of  protection,  the  evil  effects  attendant  upon 
its  adoption  or  continuance,  and  the  benefits  to  be  derived 
from  its  abolition  having  been  developed,  we  will  now  in- 
quire what  rates  of  duty  operate  practically  as  protective. 
As  protection  and  prohibition  curtail  importations,   it  fol- 
lows that  the  converse  of  the  proposition  is  true ;  that,  if 
the  duty  curtails  importation,  it  is  protective  or  prohibi- 
tive.    All  duties  that  are  protective  are  prohibitive,  but 
all  that  are  prohibitive  are  not  protective— only  such  of 
them  as  are  laid  upon  articles  that  are  or  can  be  produced 
in  the  country.     Importations  are  regulated  by  the  values 
abroad  and  at  home.    If  the  cost  of  the  article  is  less  than 
it   will  bring  in  our   market,  it  is  imported,  because  it 
then  pays  a  profit  on  the  capital  employed.    The  difference, 
then,  between  the  wholesale  market  value  of  an  article  in 
the  foreign  market,  with  freight  added,  and  its  value  in 
ours,  is  the  amount  of  protection   our   producers  of  the 
same  article  derive  from  the  duty.     It  follows  from  this 
that,  the  cost  here  being  enhanced  by  just  the  amount  of 
duty,  all  tariffs  are  prohibitive,  in  so  far  as  they  raise  the 
cost  to  consumers,  and  thus  keep  commodities  above  the 


INDIRECT  TAXATION.  219 

reach  of  numbers,  who,  at  a  lower  price,  would  be  able  to 
indulge  in  their  use.  In  so  far  as  those  articles  were 
home  produced,  the  duty  would  be  protective,  and,  on  all, 
more  or  less  prohibitory. 

But  government  must  raise  a  revenue  by  taxation,  either 
direct  or  indirect,  and  hence  we  come  to  consider  the  pro- 
priety of  collecting  it  by  a  discriminative  tariff,  that  shall 
avoid  all  prohibition  that  keeps  out  whatever  articles  con- 
sumers would  take,  had  they  to  pay  no  larger  addition  to 
the  cost  of  production  or  importation  than  the  amount 
necessary  to  furnish  the  revenue.  This  is  what  is  known 
as  a  revenue  tariff.  As  to  incidental  protection,  if  protec- 
tion is  an  evil  to  be  shunned,  it  must  be  discarded  in  all  its 
forms.  And  if  a  revenue  tariff  only  is  "proper,  it  admits 
of  no  incidental  effect,  as  that  would  just  so  far  diminish 
its  revenue  effect. 

The  other  method  of  raising  the  revenue,  by  direct 
taxation,  will  likewise  prohibit  consumers  from  the  enjoy- 
ment of  all  such  quantities  and  qualities  of  articles  as  the 
lessening  of  their  means,  by  the  amount  of  tax  they  pay, 
will  keep  beyond  their  reach.  In  one  method  they  pay 
the  tax  by  the  enhanced  price  of  the  article  ;  in  the  other, 
getting  the  commodity  lower,  they  pay  the  tax  in  money 
saved  by  purchasing  the  article  at  the  reduced  prices. 
Which  of  these  two  modes  of  taxation  is  best  ? 

In  favor  of  INDIRECT  TAXATION — It  may  be  said  that 
imposts  may  be  so  graduated,  as  not  to  cast  the  burden  so 
unequally  as  has  been  alleged  by  the  opponents  of  indirect 
taxation.  Observing  the  distinction  between  articles  of 
luxury,  convenience,  and  necessity,  rates  might  be  ar- 
ranged in  a  geometrical  gradation  of  perhaps  five,  fifteen, 


220  TAXATION. 

and  forty-five  per  cent. ;  always  with  a  view  to  charging 
a  high  rate  of  duty  upon  all  articles  used  by  the  rich  for 
mere  show,  and  not  necessary  to  their  comfort.  The  ad 
valorem  principle  now  practised  in  the  United  States  aids 
greatly  in  making  such  an  apportionment  justly  graduated 
to  the  abilities  of  the  classes  consuming  the  commodities. 
As  certain  articles  of  necessity  and  comfort,  as  cottons  and 
sugar,  are  consumed  nearly  or  quite  as  largely  by  the 
poor  and  those  in  moderate  circumstances  as  by  the  rich, 
it  is  necessary  to  discriminate  in  quality  in  order  to  appor- 
tion the  tax  properly.  As  those  with  more  ability  would 
consume  finer  qualities  of  greater  value,  they  would,  by 
paying  ad  valorem  rates,  contribute  in  proportion  to  their 
ability  a  larger  amount  to  the  revenue.  Should  it  be  said 
that  the  rich  would  restrict  their  consumption  of  luxuries, 
and  thus  escape  their  portion  of  contribution  to  the  trea- 
sury, it  may  be  answered,  that  such  will  not  be  the  case 
until  men  and  women  cease  to  possess  a  taste  for  luxuries, 
and  the  emulation  shall  no  longer  exist  that  incessantly 
urges  man  to  vie  with  his  neighbor  in  the  fineness  and 
splendor  of  his  appointments,  personal,  household,  and 
other;  not  until  the  imitativeness  inherent  in  his  nature 
shall  cease  prompting  man  to  gain  possession  of  the  same 
his  neighbor  enjoys.  Those  articles  whose  use  is  the  gra- 
tification of  vanity  will  always  bear  a  high  tax. 

A  tax  on  imports,  where,  because  the  duty  may  be  laid 
on  some  articles  not  produced  here,  or  may  be  less  than 
the  difference  between  the  producing  cost  here  and  that 
abroad,  there  is  no  total  prohibition,  nor  any  protection — 
if  there  be  protection,  the  people  pay  more  through  the 
gency  of  indirect  taxation  than  they  can  gain  off  the  fo- 
reigners— falls  partly  upon  the  foreign  consumers  of  our 


INDIREC^  TAXATION.  221 

goods  taken  in  exchange.  The  diminution  in  amount  of 
foreign  products  consumed  results  in  our  taking  less,  and, 
while  the  foreigners  continue  to  consume  the  full  amount 
of  ours,  in  their  sending  us  specie,  deranging  exchanges. 
Their  products  become  low  there,  and  ours  high  here. 
What  they  consume  of  ours  is  at  greater  cost.  But  it  is 
well  to  remark,  that  these  are  temporary  and  not  perma- 
nent conditions,  as  the  foreign  nations  will  soon  take  no 
more  than  they  can  return  their  products  for  in  exchange, 
or  will  impose  a  retaliatory  duty  on  our  products;  unless 
ours  were  of  vital  necessity  to  some  one  nation,  and  it  kept 
up  the  paying  to  us  of  a  sum  of  specie  drawn  from  other 
nations,  by  a  process  similar  to  that  by  which  we  drew 
from  it. 

It  is  no  inconsiderable  objection  to  direct  taxation,  that 
it  would  involve  the  necessity  for  those  domiciliary  visits 
of  the  functionary  which  are  so  repugnant  to  the  citizen, 
who  is  prone  to  regard  the  investigation  as  an  impertinent 
scrutiny  into  his  private  affairs,  and  which  he  is  likely  to 
consider  as  scarcely  less  burdensome  than  the  tax  itself. 

By  a  tariff  tax  the  amount  is  generally  paid  at  the  time 
and  in  the  manner  most  convenient  to  the  contributor.  "  It 
is  paid,"  says  Mr.  Mill,  "  at  a  time  when  he  has,  at  any 
rate,  a  payment  to  make ;  it  causes,  therefore,  no  additional 
trouble,  nor  any  inconvenience  but  what  is  inseparable 
from  the  payment  of  the  amount.  He  can  also,  except  in 
the  case  of  very  perishable  articles,  select  his  own  time 
for  laying  in  a  stock  of  the  commodity,  and  consequently 
for  payment  of  the  tax.  The  producer  or  dealer  who  ad- 
vances these  taxes  is,  indeed,  sometimes  subjected  to  incon- 
venience :  but  in  the  case  of  imported  goods,  this  inconve- 
nience is  reduced  to  a  minimum  by  what  is  called  the 
warehousing  system.3'  This  system  is  now  in  successful 


222  TAXATION. 

operation  in  this  country,  and  by  leaving  the  duty  uncalled 
for  until  the  period  of  consumption  arrives,  it  materially 
mitigates  the  effect  of  the  tax,  and  operates  to  favor  the 
impost  form  by  destroying  the  obnoxious  feature  of  injury 
to  the  commercial  community,  through  the  loss  of  interest 
on  the  amount  of  duty  advanced  by  them  to  government, 
formerly,  often  far  in  advance  of  the  reimbursement  made 
to  them  by  consumers. 

It  has  been  said  in  favor  of  indirect  taxation,  that  the 
people  would  so  sensibly  feel  the  burden  when  directly 
imposed  as  to  engender  dissatisfaction,  that  would  endanger 
the  stability  of  the  government, — operating  perhaps  in  this 
manner, — if  the  system  required  the  States  to  furnish  their 
several  quotas,  it  might  have  the  disadvantage  of  causing 
them  to  feel  so  sensibly  the  payment,  that  whenever  any 
cause  should  originate,  having  a  tendency  towards  nullifica- 
tion, the  palpable  payment  of  this  contribution  for  the 
maintenance  of  an  union,  such  State  might  be  already 
dissatisfied  with,  would  be  magnified  into  a  grievous  burden 
that  under  such  circumstances  would  fcfe  felt  to  be  too  one- 
rous to  be  borne  ;  a  feeling  that  would  give  an  impetus  to 
the  existing  dissatisfaction.  Also,  if  the  quota  was  exacted, 
or  if  the  direct  tax  was  collected  by  officers  of  the  general 
government  in  the  ordinary  method  of  collecting  direct 
taxes,  it  would  be  called  for  at  a  certain  time,  and  the  drain 
of  so  large  an  amount  from  the  people's  pockets,  to  effect 
at  once  an  engorgement  of  the  federal  treasury,  would  de- 
range the  finances  of  the  country.  Under  impost  taxation, 
on  the  contrary,  the  receipts  being  gradual,  no  such  enor- 
mous excesses  occur. 

For  DIRECT  TAXATION,  in  objecting  to  a  tariff  it  may 
be  said  that  taxes  being  imposed  for  the  support  of  go- 


DIRECT  TAXATION.  223 

rernment,  they  should,  as  the  only  just  method,  be  distinctly 
and  directly  levied  upon  individuals  in  proportion  to  their 
ability  to  pay,  and  nothing  but  the  tax  be  exacted.  The 
assessment  of  indirect  taxes  being  made  upon  the  importer 
instead  of  the  consumer,  the  latter  is  made  to  pay  a  much 
larger  amount  than  the  sum  accruing  to  the  revenue.  A 
yard  of  imported  cloth,  costing  the  importer  at  foreign 
prices,  with  freight  and  charges  added,  100  cents,  the  duty 
of  30  per  cent.,  paid  by  him,  raises  the  cost  to  130.  He 
sells  to  the  retailer  at  a  profit  of  15  per  cent. ;  and  the  lat- 
ter, it  having  cost  him  $1,50,  sells  it  to  the  consumer  at  an 
advance  of  25  per  cent.  The  latter,  there  fore,- pays  $1,87 
for  the  article.  Supposing  no  duty,  the  importer  selling  at 
15  per  cent,  profit,  would  have  received  from  the  retailer 
81,15,  who,  adding  25  per  cent.,  would  have  sold  to  the 
consumer  for  $1,44.  By  this  process  the  cost  of  the  con- 
sumer is  increased  to  87  cents  beyond  that  to  the  importer, 
or  43  cents  more  than  it  would  be  if  no  duty  was  imposed, 
— paid  by  him  that  government  may  collect  30  cents  of 
revenue.  The  forty-three  cents  is  here  prohibitory,  and,  on 
home  produced  articles,  protective.  Hence  it  is  impossible 
to  avoid  these  contingencies  under  a  tariff  taxation,  and,  the 
portion  of  the  tax,  which,  under  supposed  non-protection, 
was  seen,  on  a  preceding  page,  to  fall  upon  foreign  consu- 
mers, is  offset  by  that  borne  by  the  home  consumers,  and 
the  effect  of  that  vengeful  wounding  of  the  nose,  is  injury 
to  the  face. 

With  regard  to  taxing  articles  of  mere  show  extremely 
high,  here  the  direct  possesses  an  advantage  as  compared 
with  the  indirect ;  as  a  large  variety  of  the  articles  of 
show,  such  as  jewelry,  are  of  small  bulk,  and  easily 
smuggled,  forcing  government,  in  order  to  collect  any 
revenue  at  all  from  them,  to  impose  a  very  low  rate  of 


224  TAXATION. 

duty,  much  lower  than  that  laid  upon  many  articles  neces- 
sary to  the  comfort  of  the  poorer  classes.  If  imposed 
directly,  a  much  higher  rate,  productive  of  more  revenue, 
and  one  more  consistent  with  justice  and  good  economy- 
promoting  policy,  could  be  successfully  collected.  Another 
objection  to  the  indirect  imposition  would  be  the  difficulty 
of  avoiding  running  into  protection  of  the  articles,  a  result 
which  should  always  be  avoided,  though  less  objectionable 
when  only  favoring  the  producers  of  articles  of  mere  show 
at  the  cost  of  the  richer  class  :  cheapness  being  undesirable 
when  articles  are  bought  with  superfluous  wealth  for  the 
sake  of  their  costliness  and  variety,  as  these  would 
cease  to  be  purchased  by  the  rich  when  they  became 
common,  and  some  other  newly  rare  would  be  substituted 
for  them. 

That  the  people  would  be  so  unwilling  to  pay  a  direct 
tax  as  to  endanger  the  stability  of  the  government,  is  an 
idle  fear.  Thanks  to  the  nature  of  our  institutions,  their 
effects  are  such  as  to  do  away  with  the  probability  of  such 
a  result.  The  effect  also  of  the  abolition  of  tariffs,  the  free 
trade  effects  of  increased  enjoyments,  education,  and  en- 
lightenment, would  be  safeguards  for  the  continuance  of  the 
system  that  promoted  them.  Whenever  the  States  become 
unwilling  to  pay  openly  and  honestly  for  the  maintenance 
of  the  Union ;  when  it  shall  be  demonstrated  by  their  acts 
that  they  are  only  to  be  made  to  suffer  its  continuance  by 
being  led  blindfold  into  making  the  necessary  contributions, 
unconscious  of  the  cost,  then  the  time  will  have  arrived 
for  a  dissolution  of  the  onerous  bond ;  its  continuance 
would  be  anti-republican. 

The  expenses  attending  the  collection  of  a  given  amount 
of  revenue  are  very  great.  The  large  establishments  of 
custom  houses,  hosts  of  officials,  revenue  service,  dec. 


DIRECT  TAXATION.  225 

swell  the  expenses  to  a  large  amount.  From  1789  to  1847 
inclusive,  the  net  amount  of  duties  collected  in  the  United 
States  was  $908,997,223.  The  expenses  of  collecting 
the  same  at  the  several  collection  districts,  amounted  to 
$48,615,965.  When  to  this  is  added  the  expense  of 
maintaining  the  revenue  service,  an  amount  that  would 
doubtless  be  found  to  be  enormous,  could  we  penetrate  a 
certain  haziness  enveloping  the  records  that  should  exhibit 
the  cost,  it  will  be  concluded  that  a  more  economical 
system  of  collection  could  without  doubt  be  devised.  Col- 
laterally, the  direct  system  would  cause  economy  in 
national  expenditures,  by  preventing  those  measures  involv- 
ing large  and  unnecessary  expenditures,  for  the  means  of 
prosecuting  which,  when  the  people  felt  the  application 
palpably  upon  their  pockets,  they  would  refuse  to  be  taxed. 
It  would  thus  lessen  the  probability  of  a  national  debt 
accumulating.  In  a  country  possessing  a  superabundance 
of  capital,  a  national  debt  contracted  for  war  or  other  un- 
productive expenditures,  by  borrowing  from  the  capital  of 
the  country,  withdraws  so  much  of  the  national  means  for 
furnishing  employment  to  productive  labor ;  takes  away 
so  much  of  the  fuel  that  is  to  feed  the  current  year's  pro- 
duction. Government  enters  the  market  and  gets  posses- 
sion of  capital  for  unproductive  use,  by  outbidding  those 
who  would  have  secured  it  for  productive  uses.  The  rise 
of  interest  is  a  test  that  the  loan  was  no  absorption  of  an 
excess  of  capital  that  could  not  have  found  productive 
employment.  That  this  effect  was  not  more  severely  felt, 
and  government  was  enabled  to  borrow  at  a  moderate  rate 
of  interest  in  this  country  when  contracting  the  debt 
growing  out  of  the  recent  war  with  Mexico,  is  attributable 
to  the  fact,  that,  in  consequence  of  the  free  trade  policy 

10* 


226  TAXATION. 

which  went  into  operation  soon  after  the  commencement 
of  the  war,  and  co-operative  causes,  there  was  a  rapid  accu- 
mulation and  a  large  influx  of  capital  from  abroad.  This 
furnished  the  supply  absorbed  by  the  loan,  without  en- 
croaching so  largely  upon  the  demand  for  productive 
investment  as  to  raise  the  rate  of  interest. 

Nevertheless,  the  plan  adopted  of  meeting  the  war 
expenses  by  a  loan  has  entailed  upon  the  people  of  this 
country  an  expenditure  equal  to  quadruple  the  amount  of 
the  loan.  The  act  of  borrowing,  which  withdrew  the  sum 
from  the  productive  channels  of  investment,  into  which  it 
would,  under  all  the  favoring  circumstances  above  named 
as  augmenting  capital,  have  sought  and  found  employment 
at  a  lower  rate  of  interest,  cost  labor  the  amount  of  such 
sum,  under  the  process  just  before  stated.  The  loss  was 
then  sustained  by  the  labor  of  those  years  in  which  the 
expenditure  was  incurred,  and  the  money  borrowed.  The 
conditions  of  the  loan,  as  of  all  loans,  requiring  future 
payment  of  the  sum,  whenever  pay  day  comes,  that 
amount  will  have  to  be  abstracted  from  the  earnings  of  the 
current  labor  of  the  year  of  payment.  It  is  then  drawn 
from  labor  by  taxes,  going  into  the  general  treasury. 
Labor  thus  sustains  double  the  expenditure,  and,  in  addi- 
tion, pays  in  taxes  the  annually  compounding  interest ;  and 
also  bears  the  loss  growing  out  of  the  non-existence  of 
accumulating  capital  of  savings  which  would  have  pro- 
ductively employed  labor;  and  this  may  be  estimated 
at  as  much  as  the  interest.  Thus  if  $66,000,000 
of  debt  be  contracted  for  twenty  years,  the  annual 
interest  paid  in  the  form  of  taxes  by  labor  is  at  six 
per  cent.  $3,960,000  ;  in  twenty  years  at  the  simple 
rate  the  interest  amounts  to  $79,200,000,  but  at  the 
compounded  rate  which  labor  sustains  it  amounts  to 


DIRECT  TAXATION.  227 

$145,670,868.  As  to  the  further  loss  :— The  sixty-six 
millions,  had  it  not  been  originally  sunk  in  unproductive 
wars,  not  been  borrowed  by  government,  but  employed 
productively  by  the  people,  would  have  begotten  a  con- 
tinually reproduced  capital  of  progressively  enlarging 
accumulations,  which  would  have  obtained  from  the 
original  action  of  productive  labor,  and  would  have  been, 
annually  compounding  like  the  interest,  employed  each 
year  in  new  production.  Thus,  if  $66,000,000  effect 
annually  10  per  cent,  of  accumulated  addition  to  their 
amount  through  the  medium  of  the  production  of  a  much 
greater  amount  of  commodities,  the  addition  to  labor 
employing  capital  is  $6,600,000  a  year,  or  $132,000,000 
in  twenty  years ;  or,  compounded  annually,  it  is  $444,- 
014,926.  The  gain  effected  by  the  employment  in 
productive  uses  of  the  annually  disbursed  and  distributed 
sums  of  interest,  may  be  said  to  be  a  counter-process 
going  on  to  counterbalance  this  in  part,  and  perhaps 
entirely ;  the  rate  of  10  per  cent,  above  estimated  being 
merely  assumed.  Were  this  the  case,  the  two  costs, 
original  and  ultimate,  of  sixty-six  millions  each,  and  the 
much  larger  one  of  interest  amounting  to  $145,670,868 
still  stand  as  borne  by  labor. 

The  future  payment  of  the  original  loan  when  disbursed 
to  capitalists  from  the  public  treasury,  is  redistributed, 
much  of  it  probably,  like  the  payments  of  interest,  going 
into  channels  of  productive  investment.  But  so  far  as  it 
does,  there  is  no  counterbalancing  of  the  effect,  as  felt  by 
labor,  of  the  original  extraction  of  capital  from  protective 
labor-employing  investment  that  took  place  when  the 
capital  was  borrowed  by  government.  The  capital  of  a 
country  being  annually  consumed  and  renewed,  every 
abstraction  of  a  portion  which  would,  during  that  year, 


228     4  TAXATION. 

have  been  consumed  by  labor,  is  a  hardship  sensibly  felt 
by  such  labor  as  for  the  time  is  employed  in  consuming 
and  producing.  A  subsequent  distribution  of  capital, 
supposing  all  of  it  to  be  turned  into  productive  channels, 
is  but  a  restoring  of  the  original  abstraction,  and  does  not 
prevent  the  effects  of  the  intermediate  blows  that  have 
been  dealt  upon  labor  from  having  been  felt  as  they  in- 
flicted their  proper  wounds.  The  cost  to  labor,  occasioned 
by  borrowing,  instead  of  meeting  the  expenditure  by  a  tax 
imposed  at  the  time  of  incurring  the  expense,  leaving  out 
the  ten  per  cent,  loss  from  non-continuances,  is  still  equal 
to  twice  the  full  amount  of  the  loan,  and  the  sum  total  of 
compounded  interest.  That  is  to  say,  if  paid  at  the  time 
of  incurring  the  expense,  the  cost  to  labor  would  have 
been  $66,000,000  ;  but  in  consequence  of  the  postponement 
it  will  be  $277,670,868.  Therefore,  we  learn  that  it  is 
better  for  labor  that  war  expenditures  be  met  by  a  tax 
levied  at  the  time  they  are  incurred,  as  by  this  method 
the  cost  of  the  war  is  paid  but  once,  and  not  quadruplicated, 
as  under  the  borrowing  system. 

No  objection  grounded  upon  an  assumed  inability  of  the 
country  to  pay  the  expenses  at  the  time  of  their  being  in- 
curred, could  lie  against  the  method.  The  bulk  of  a 
country's  means  are  reproduced  annually,  and  consumed 
the  succeeding  year  in  turn.  Of  the  2000  millions  value 
of  products  annually  produced  in  the  United  States,  the 
whole  is  consumed  the  following  year  in  reproduction. 
The^more  durable  productions,  taking  the  form  of  fixed 
capital  in  buildings,  bridges,  roads,  &c.,  only  are  to  be 
excepted  from  the  general  rule ;  and  most  of  these  wear 
out  in  a  few  years.  It  would  not  be  difficult  for  23  mil- 
lions'of  people,  from  their  consumption  of  nearly  or  quite 


DIRECT  TAXATION.  229 

2000  millions,  or  eighty-seven  dollars  a  head,  to  deduct,  in 
the  year  of  incurring  an  expenditure  of  66  millions,  the 
amount  of  such  expenditure,  at  the  average  rate  of  three 
dollars  per  head.  A  modicum  of  abstinence  from  con- 
sumption would  effect  it ;  the  rate  being  but  a  fraction 
over  3  per  cent,  of  a  year's  production,  and  expiring  with 
the  year.  As  much  as  this  sum  is  annually  paid  by  con- 
sumption for  protection.  It  is  just  that  the  generation 
which  incurs  expenses  should  pay  the  cost.  We  may 
choose  to  consider  that  they  were  incurred  in  acquiring 
that  which  is  to  benefit  succeeding  generations,  and  there- 
fore the  successors  should  pay  a  portion  of  the  cost.  But  it 
does  not  follow  that  the  unnecessary  extravagance  should 
be  practised,  by  which  both  the  present  and  future  gene- 
rations should  pay  each  of  them  double  the  total  cost.  If 
the  present  does  not,  the  expense,  as  has  been  seen,  must 
devolve  upon  both.  Those  incurring  the  expenditure  can- 
not avoid  the  cost,  and,  by  not  paying,  it  is  repeated  to 
their  successors,  with  the  weighty  addition  of  interest. 

What  has  been  stated  is  based  upon  the  supposition  that 
in  both  cases  of  immediate  and  future  payment,  the 
amount  is  paid  by  labor.  In  the  case  of  deferred  pay- 
ment, the  quadrupled  amount  must  be,  with  the  exception 
of  a  deduction  from  the  first  sixty-six  millions  paid,  of  so 
much  of  it  as  was  taken  by  foreign  capital.  As  this  was 
not  drawn  from  the  capital  at  home,  which  was  re- 
quired for  productive  investment,  so  far  labor  escapes  the 
burden.  But  this  portion  of  the  loan  was  only  a  small 
part  of  the  entire  amount,  and  therefore  the  cost  to  labor 
is  not  materially  lessened.  Immediate  payment  not  only 
eventuates  diminution  in  the  sum  paid,  but  there  is  a  me- 
thod of  relieving  labor  almost  entirely  from  the  payment 


230  TAXATION. 

of  the  sixty-six  millions,  and  casting  it  upon  unproductive 
capital.  A  direct  tax  imposed,  during  the  years  of  ex- 
penditure, upon  articles  of  mere  luxury  and  show,  leaving 
untouched  the  productive  capital  that  employs  labor,  could 
have  judiciously  effected  the  object.  Labor  will  now 
have  to  sustain,  as  the  effect  of  the  deferred  payment,  a 
loss ;  of  $277,670,868  ;  and,  in  addition,  as  an  effect  of 
collecting  the  principal  and  simple  interest  of  the  loan, 
amounting  to  $145,200,000,  by  indirect  taxation, — by 
which  means  of  collection  every  30  cents  collected  by 
government  costs  the  consumer,  by  estimate,  43  cents — 
the  sum  of  $62,9202000.  Deferred  payment  and  indi- 
rect taxation,  combined,  cast  upon  labor  a  burden  of 
$340,590,868.  This  is  subject  to  a  reduction  for  the 
amount  of  impost  collected  on  articles  of  show  and  luxury  ; 
but  this  reduction  is  more  than  counterbalanced  by  the 
amount  paid  for  protection  under  the  impost  system. 

With  such  ease  and  at  a  stealthy  pace,  scarcely  per- 
ceptible to  the  most  careful  watcher,  may  a  national  debt 
accumulate  and  cast  its  heavy  weight  upon  the  bent  back 
of  toiling  labor.  Each  year  of  its  existence  increases  at 
a  compound  rate  the  amount  of  the  tax.  When  such  an 
enormous  result  of  injustice  may  grow  out  of  the  tempo- 
rary contraction,  during  two  years'  expenditure,  of  the 
moderate  debt  of  66  millions,  what  would  be  the  effect  of 
contracting  a  permanent  debt  of  200  to  500  millions  ?  Its 
prophetic  history  is  written  in  the  past  of  England's 
misery,  and  France's  destitution.  Economy  for  this  coun- 
try, that  shall  prevent  the  necessity  for  extending  the  field 
of  taxation  till  it  reaches  the  consumption  of  labor,  lies  in 
open  and  direct  taxation,  behind  which  no  protection  and  no 
indebtedness  may  lurk. 


DIRECT  TAXATION.  231 

It  is  to  be  remarked  in  this  place,  that,  under  the 
institutions  and  the  democratized  educational  influences 
prevailing  and  progressively  improving  in  this  country 
with  the  march  of  political  and  economic  science,  the 
bulk  of  capital  must  continue  to  be  employed  in  product- 
ive channels  for  a  longer  period  than  the  simple  facts  of 
undeveloped  natural  advantages  and  scarcity  of  capital 
would  of  themselves  warrant. 

With  reference  to  the  diminished  probability  of  directly 
collecting  money  for  war  measures,  there  is  a  countervail- 
ing argument  that,  although  increased  taxation  is  necessary 
for  war  expenditures,  yet  for  all  the  great  measures  of 
public  reform  designed  to  improve  the  condition  of  the 
people,  whether  educational  or  sanitary,  whether  they 
embrace  improvements  in  prison  discipline,  or  the  eman- 
cipation of  slaves,  an  increase  of  taxation  is  likewise 
necessary,  and  hence  the  tax  should  be  imposed  in  the 
indirect  form,  in  which  it  is  most  extractable,  for  the 
accomplishment  of  these  improvements.  This  reasoning, 
however,  has  no  force  when  applied  to  this  country,  where 
all  these  measures  are,  or  should  be,  undertaken  and 
performed  by  the  local  governments  of  the  states,  wherein 
the  system  of  taxation  is  already  direct. 

It  may  be  adduced  as  not  unwoHhy  of  consideration  in 
favor  of  direct  taxation,  that,  if  adopted,  an  annoying 
bone  of  contention  that,  as  long  as  tariffs  exist,  will  agitate 
and  excite  the  legislative  councils,-  may  be  finally  buried, 
and  cease  to  divert  congressional  deliberations  from  topics 
necessary  to  the  welfare  of  the  country  at  large.  Not 
until  then  will  special  interests  cease  their  persevering 
efforts  to  mould  the  political  action  of  the  country  into 
measures  designed  to  build  up  the  fortunes  of  a  class  at 
the  expense  of  consumers  at  large. 


232  TAXATION. 

It  may  be  said  that  the  establishment  of  exactly  discri- 
minating duties  is  impossible.  The  cost  of  imports  de- 
pends upon  two  variables,  the  quantity  of  commodities 
exchanged  for  them,  and  the  cost  of  producing  those  com- 
modities. The  cost  of  production  varying  constantly  with 
the  enhanced  or  diminished  value  of  capital  in  the  several 
producing  countries  in  different  years,  with  the  cost  of 
living,  with  the  various  and  frequent  improvements  in  ma- 
chinery, with  the  experience  of  producers  ;  and  quantities, 
prices,  and  demand  being  affected  by  currency  derange- 
ments, political  disturbances,  &c.,  variations  will  frequent- 
ly take  place  in  the  line  of  demarcation  between  the  protec- 
tion and  revenue  effects  of  tariffs.  Repeated  investigations 
would  be  necessary  as  to  the  relative  cost  of  production 
abroad  and  at  home,  and  a  constant  chase  would  needs  be 
kept  up  after  the  mercury  rising  and  falling  in  the  indus- 
trial barometer.  A  variety  of  causes  would  complicate  the 
embarrassments,  and  render  it  difficult  to  dodge  the  protec- 
tion. A  moment's  reflection  shows  the  difficulty  lawgivers 
must  encounter  in  regulating  tariffs.  Satisfied  with  the 
result  of  one  inquiry,  they  would  scarcely  have  congratu- 
lated themselves  upon  the  discovery  of  a  rate  which  pro- 
duced the  necessary  revenue  without  protecting  than, 
presto  !  Yankee  ingenuity  outstrips  John  Bull's  sturdy 
stride,  and  lo  !  they  find  the  tariff  planted  on  the  platform 
of  protection  ;  importations  fall  off,  and  the  revenue  dimi- 
nishes. Striving  to  retrieve  this  backward  step  (of  tariff 
taxation,  not  labor,  that  has  taken  a  mighty  stride  forward), 
they  lower  the  duty  to  take  off  the  protection,  when,  with 
the  increased  importations  caused  by  this  comparative  free 
trade,  all  goes  well  for  a  time,  until  the  capital  and  labor 
that  have  again  returned  to  their  natural  channels  under 
this  beneficial  absence  of  protection  advance  beyond  the 


SUMMING  UP.  233 

line  in  company  with  what  had  continued  in  the  previously 
protected  channels,  and  a  new  revision  of  the  tariff  is  ren- 
dered necessary.  The  truth  is,  this  country  progresses  too 
rapidly  for  tariffs — naught  but  entire  free  trade  leaves  suf- 
ficient scope  for  its  mighty  energies.  How  little  do  we 
need  protection ! 

IN  SUMMING  UP,  we  observe,  that  it  is  to  consumption  we 
must  always  resort.  Whatever  its  form,  the  tax  must  al- 
ways fall  upon  the  consumers,  upon  productive  or  unpro- 
ductive consumption.  If  it  be  levied  directly  upon  real 
property,  the  man  of  wealth  owning  houses  raises  their 
rents ;  the  butcher,  who  must  be  a  tenant  if  not  a  landlord, 
charges  the  shoemaker  more,  by  the  amount  of  the  tax,  for 
the  meat  he  eats,  who,  in  turn,  must  get  more  for  his 
shoes,  and  so  around  the  circle  of  consumption.  The  ob- 
ject to  be  sought  then  is,  so  to  simplify  the  method  of  col- 
lection, as  to  reduce  its  incidental  expenses  to  the  lowest  pos- 
sible amount  consistent  with  security  ;  so  to  impose  it  as  not 
to  impede  production  ;  and  to  avoid  all  collateral  payment  of 
bonuses  to  producers  in  order  to  secure  their  success  over 
competition;  and  also,  to  avoid  the  collateral  payment  of  pro- 
fits upon  the  original  tax  collected  for  government.  This 
last  must  ever  be  the  case  under  indirect  taxation,  as  we 
have  seen  it  is  in  the  illustration  of  the  enhanced  cost  of 
the  consumer's  cloth,  by  addition  of  the  per  centage  of  profit 
to  the  importer  on  the  amount  of  duty  he  pays.  The  bonus 
is  paid  under  the  form  of  protection  ;  the  expense  of  collect- 
ing an  indirect  tax  we  know  to  be  greater  than  that  of  a 
direct  tax  need  be  ;  and  when  imposed  upon  the  articles 
consumed  by  laborers  it  checks  production — many  articles 
of  mere  show  and  luxury  consumed  unproductively,  are 
more  easily  reached  by  a  direct  than  by  an  indirect  tax. 


234  TAXATION. 

The  tariff  system  now  exists  as  our  fiscal  lever,  and 
will  for  some  time  longer ;  it  is,  therefore,  for  those  who 
are  not  disposed  to  favor  an  entire  change  from  this  system 
to  one  of  direct  taxation,  to  exert  themselves,  and  lop  off 
its  hideous  excrescences,  a  work  which  has  been  efficiently 
and  well  begun  by  the  tariff  of  1846,  and  leave  it  in  a  state 
as  perfect  as  it  is  capable  of  assuming.  Granted  !  It  is 
evident  that  the  duty  imposed  on  many  articles  by  our 
tariff  is  too  high.  Take  off  a  certain  amount  of  rate,  and 
if  the  importations  increase  sufficiently  to  make  up  the 
same  amount  of  revenue  as  was  collected  under  the  higher 
rate  of  duties,  this  much  of  the  rate,  if  they  are  home  pro- 
duced, was  protective.  Therefore,  if  the  protection  is 
taken  off,  the  revenue  will  not  be  diminished,  and,  as  we 
have  before  seen,  increased  quantities  of  commodities  are 
brought  within  reach  of  consumers. 

If,  upon  the  rate  being  lowered,  importations  are  not 
increased,  the  previous  rate  was  not  protective  nor  prohibi- 
tive. But  this  is  never  the  case,  because  the  lower  the 
rate,  the  less  the  cost,  the  greater  the  consumption,  until 
reaching  that  point  where  we  would  cease  to  have  com- 
modities to  exchange  for  the  foreign.  In  other  words, 
when  each  individual  of  the  consumers  is  not  able  to  buy 
more  of  the  articles.  And  this  point  under  diminishing 
duties  is  not  reached,  because  with  increase  of  abundance 
comes  ever  increase  of  production  and  riches,  and  ability 
to  buy  for  consumption. 

The  dilemma  then  constantly  presents  itself  of  the  im- 
possibility of  keeping  in  advance  of  protection  and  prohibi- 
tion, they  following  close  upon  the  heels  of  consumption 
and  production.  Prohibition  cannot  be  avoided ;  and, 
under  the  variables  affecting  production,  how  much  of  it 
may  be  protective  is  a  nice  question,  one  impossible  to 


SUMMING  UP.  235 

determine  with  accuracy.  The  old  difficulty  of  finding 
that  time  of  demarcation  at  which  to  stop,  attaches  itself 
inseparably  to  the  tariff.  Rather  than  endanger  the  con- 
suming interests,  by  accidentally  keeping  out  of  their  reach 
any  commodities  that  might  otherwise  fall  within  it,  is  it 
not  better  to  avoid  a  system  of  taxation  that  is  so  fraught 
with  the  danger  of  these  accidents  ? 

Is  not  the  system  of  a  revenue  tariff,  with  incidental  or 
accidental  protection,  delusive  and  dangerous  ?  A  revenue 
tariff  is  the  Scylla  and  Charybdis  system  of  taxation. 

A  just  taxation  is  one  that  shall  take  nothing  from  the 
people  (except  the  necessary  expense  of  economical  collec- 
tion) but  what  goes  into  the  treasury  for  the  expenses  of 
that  government  which  guards  them  ;  and  is  one  that  debars 
them  from  no  enjoyment  that  they  might  possess,  did  they 
simply  pay  directly  to  government  the  net  amount  of  its 
just  demand.  Is  it  not  then  a  rational  conclusion  that  a 
just  apportionment  of  taxation  and  a  tariff  tax  are  incompa- 
tible ? 

The  direct  system  is  most  in  accordance  with  the  spirit 
of  our  institutions.  It  has  been  said  that  "the  best 
government  is  that  which  governs  the  least ;"  it  may  be 
added  that  the  best  protection  is  that  which  restricts  the  least. 
Upon  this  subject  Dr.  Franklin  says  :— "  Perhaps  in  gene- 
ral it  would  be  better  if  government  meddled  no  further 
with  trade  than  to  protect  it,  and  let  it  take  its  course. 
Most  of  the  statutes,  acts,  edicts,  arrets,  and  placards  of 
parliaments,  princes,  and  states,  for  regulating,  directing, 
or  restraining  of  trade,  have,  we  think,  been  either  politi- 
cal blunders,  or  jobs  obtained  by  artful  men  for  private 
advantage,  under  pretence  of  public  good.  When  Colbert 
assembled  some  wise  old  merchants  of  France,  and  desired 


236  TAXATION. 

their  advice  and  opinion  how  he  could  serve  and  promote 
commerce ;  their  answer,  after  consultation,  was  in  three 
words  only,  '  Laissez  nous  faire.'  It  is  said  by  a  very 
solid  writer  of  the  same  nation,  that  he  is  well  advanced 
in  the  science  of  politics  who  knows  the  full  force  of  that 
maxim,  pas  trop  gouverner,  which  perhaps  would  be  of 
more  use  when  applied  to  trade  than  in  any  other  public 
concern.  It  were,  therefore,  to  be  wished  that  commerce 
were  as  free  between  all  the  nations  of  the  world  as 
between  the  several  counties  of  England.  So  would  all, 
by  mutual  communication,  obtain  more  enjoyment.  Those 
counties  do  not  ruin  each  other  by  trade,  neither  would 
the  nations."  When  at  this  day  we  look  at  the  operation 
of  free  trade  between  the  several  states  of  our  Union,  so 
happy  in  its  effects,  we  are  disposed  to  extend  and  apply 
the  remark  of  Dr.  Franklin,  and  wish  that  the  taxation  for 
the  support  of  the  confederation  were  levied  like  that  for 
sustaining  the  governments  of  the  several  states  ;  and  that 
we  realized  the  consequent  result  of  a  commerce  as  free 
between  the  confederated  Union  and  the  nations  of  the 
world  as  that  between  the  several  states  ;  and  no  indirect 
system  of  taxation  existed,  indirectly  to  impose  sumptuary 
laws  upon  the  masses,  in  opposition  to  the  just  method  of 
taxation. 

In  this  case,  however,  though  in  a  minor  degree,  as  in 
that  of  slavery — which  could  not  be  suddenly  rent  away, 
and  slaves  be  raised  into  a  condition  of  self- relying  liberty, 
without  injustice,  nor  without  injuring  those  it  was  de- 
signed to  benefit — changes  should  be  gradual,  lest  the 
bouleversement  alarm  the  timid  and  injure  vested  interests. 
Therefore,  a  change  securing  the  abolition  of  the  most 
salient  protective  features  of  the  present  tariff,  as  this  has 


SUMMING  UP.  237 

done  of  the  preceding,  is  all  it  is  proper  to  accomplish  at 
the  next  effort.  There  are  possibly  a  limited  number  of 
interests  adapted  by  nature  to  the  circumstances  of  the 
country,  yet  so  accustomed  to  past  protection  that  the 
sudden  and  entire  removal  of  that  now  existing  would 
cause  bankruptcies ;  and  this  requires  that  the  process  be 
one,  extending  over  a  period  of  perhaps  twenty  years,  that 
enables  them  to  gather  strength  and  hardihood  under 
gradually  falling  tariffs. 

A  kindred  measure  with  free  exchange,  and  directly 
promoting  equalization  and  independence  ;  that  of  govern- 
ment  bestowing  quarter  sections  of  its  land  upon  actual 
cultivators  "  without  money  and  without  price,"  furnishing 
every  citizen  with  what  is  then  permitted  to  be  an  exempted 
homestead,  and  refraining  from  sale  and  patent  of  more 
than  one  section  to  an  individual,  is  not  subject  to  this 
necessity  for  delay,  but  calls  for  instant  adoption. 

Protection  removed,  and  the  tariff  changed  to  direct 
taxation,  the  day  could  not  be  far  distant  when  consump- 
tion's gain  would  have  amounted  to  a  sufficiency  for  pay- 
ing the  cost  of  removing  existing  restriction  upon  the 
freedom  of  the  negro.  Then,  whenever — the  change  being 
felt  by  them  to  be  compatible  with  their  interests,  and 
called  for  by  the  state  of  local  public  sentiment — the 
slave  states  should  respectively  or  collectively  express 
their  voluntary  determination  to  begin  the  work  of  emanci- 
pation and  colonization,  those,  whose  radical  views  would 
now  urge  from  pulpit  and  from  stump  immediate  loosening 
of  the  hold  a  healthful  conservatism  maintains,  or  their  sue- 
cessors,  would  have  an  opportunity  of  responding  to  the 
direct  call  of  taxation  for  the  means  wherewith  the  free 
states,  through  their  separate  independent  action,  should 


238  TAXATION. 

aid  in  a  great  work  that  is  to  redound  to  the  glory  of  the 
nation  at  large.  Then,  if  their  precept  endured  the  cost 
of  practice,  and  they  failed  not  in  the  work,  the  much 
desired  end  would  be  rightfully  and  cheaply  attained  ;  and 
the  twentieth  century,  dawning  upon  the  well  established 
practice  of  FREE  EXCHANGE  enjoyed  by  a  population  of 
100,000,000,  spreading  from  Canada  to  Cuba,  before  the 
close,  may  signalize  its  fitting  union  with  FREE  LABOR 
and  FREE  SOIL. 


THE    END. 


\ 


o 


ITY  OF   GUIFORNIH         LIBRARY   OF   THE   UNIVERSITY   OF   CALIFORNIA 


ITY  OF   CALIFORNIA         LIBRARY   OF  THE   UNIVERSITY   OF   CALIFORNIA 


Qj^AiQ 
THE   UNIVERSITY   OF   CALIFORNIA 


LIBRARY   OF   THE   UNIVERSITY   0 


THE   UNIVERSITY  OF   CALIFORNIA         LIBRARY   OF  THE   UNIVERSITY   0 


§>§^ 


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